Ato Forson: Spending Controls Driving Economic Recovery

Finance Minister Dr. Cassiel Ato Forson says government’s fiscal correction measures have helped reduce public expenditure, improve the country’s fiscal position and place public debt on a sustainable path.

According to him, the government’s economic recovery programme has been anchored on three major reforms — fiscal correction, modernisation of the tax regime and complementary fiscal policies aimed at supporting inflation control and exchange-rate stability.

Presenting the 2026 Mid-Year Fiscal Policy Review in Parliament, Dr. Ato Forson said the fiscal correction programme was designed to restore control over public finances, introduce expenditure discipline and rebuild confidence in Ghana’s economic management.

He said the measures had resulted in a sharp reduction in primary expenditure, which declined from 18.7 per cent of Gross Domestic Product (GDP) in 2024 to 13.2 per cent of GDP in 2025.

The Finance Minister described the 5.5 percentage-point adjustment as a major fiscal consolidation effort achieved without undermining economic growth.

He added that the primary balance improved from a deficit of 2.9 per cent of GDP in 2024 to a surplus of 2.5 per cent in 2025, signalling improved fiscal management and helping to place public debt on a downward trajectory.

Dr. Ato Forson said the fiscal reforms were intended to demonstrate to investors, development partners and Ghanaians that fiscal discipline had become central to government’s economic management strategy.

“The results speak for themselves. Every major macroeconomic indicator has improved significantly,” he told Parliament.

The Finance Minister said government had also recalibrated its IMF-supported programme by shifting the focus of fiscal consolidation from revenue-led measures to expenditure-led adjustments.

He said the approach was aimed at ensuring a fairer distribution of the economic burden while protecting vulnerable groups.

As part of efforts to prevent a recurrence of fiscal challenges, Dr. Ato Forson said the government had amended the Public Financial Management Act to introduce a binding fiscal rule requiring a minimum annual primary surplus of 1.5 per cent of GDP and a debt-to-GDP ceiling of 45 per cent by 2034.

He said the reforms were designed to institutionalise fiscal discipline and prevent excessive borrowing and uncontrolled expenditure.

The Finance Minister also announced the establishment of a Value for Money Office to improve expenditure efficiency and ensure public funds deliver maximum benefits to citizens.

Additionally, he said the government had established a Fiscal Council to strengthen fiscal oversight, transparency and accountability, while a comprehensive audit of government payables had been undertaken to eliminate irregular obligations.

Dr. Ato Forson said the reforms formed part of broader efforts to restore fiscal credibility and sustain Ghana’s economic recovery.

 

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