Ghana Faces Fiscal Tightrope as World Bank Urges Strategic Spending

World Bank

The World Bank has endorsed Ghana’s aggressive fiscal consolidation while urging the government not to sacrifice critical investments protecting vulnerable citizens.

This delicate balance emerged as a central theme at the launch of Ghana’s 9th Economic Update, where policymakers grapple with sustaining reforms without stalling social progress.

Robert Taliercio, World Bank Director for Ghana, Sierra Leone, and Liberia, acknowledged Accra’s “commitment to corrective measures” like budget reforms. These efforts yielded a positive primary balance of 1.1% of GDP in early 2025, largely through spending cuts.

“The first half of 2025 saw encouraging improvements,” Taliercio stated. Yet he swiftly cautioned against austerity overreach: “While pursuing macroeconomic stability, this objective must not override maintaining strategic spending—especially for protecting the vulnerable.”

The warning spotlights Finance Minister Cassiel Ato Forson’s challenge: rebuilding fiscal buffers amid a cost-of-living crisis without gutting health, education, and social safety nets. Analysts note that excessive cuts could deepen inequality and undermine public trust. With over 8 million Ghanaians relying on social protection programs, the stakes are high.

Ghana’s government insists it will “stay the course” on stability. But the World Bank’s message is clear: fiscal discipline and compassion aren’t mutually exclusive. As one economist put it, “Starving essential services to balance books is like selling your roof to pay debts—you’ll regret it when the rain comes.”

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