Pollster and public policy analyst, Musa Dankwah, has argued that Ghana’s recent reduction in budget expenditure cannot be attributed solely to revenue shortfalls, urging a more nuanced understanding of the government’s fiscal performance in the first quarter of the year.
Commenting on reports that a revenue shortfall of GH¢2.7 billion contributed to an overall budget reduction of approximately GH¢24 billion, Mr Dankwah questioned the narrative that lower-than-expected revenue collections were the principal driver of the expenditure cuts.
According to him, government revenue collections amounted to GH¢21.3 billion during the period under review, suggesting that the spending gap was influenced by factors beyond revenue mobilisation.
”But JoyNews paa, so, a mere shortfall of GH¢2.7 billion resulted in a GH¢24 billion budget reduction?” he asked. “It suggests the shortfall is not just due to revenue underperformance because GH¢21.3 billion of that revenue has already been collected.”
Mr Dankwah, who has more than two decades of experience in finance and nearly 18 years overseeing capital programmes, noted that capital expenditure budgets are often based on ambitious assumptions that do not align with implementation realities.
Drawing on his experience working on capital expenditure programmes at Transport for London, he said delays in procurement processes, project execution challenges and bureaucratic hurdles frequently result in spending levels falling below budget projections.
”The plans are ambitious and unrealistic,” he explained. “Having an item in the budget does not automatically mean institutions can spend the money. Payments are tied to the value of work completed, and in many cases, particularly during the first and second quarters, very little work has been delivered to justify the release of funds.”
He further pointed to the government’s commitment authorisation framework, arguing that public agencies must align procurement plans with approved commitments before expenditure can be incurred.
His comments follow reports that capital expenditure recorded the largest reduction in spending during the period. Government had budgeted GH¢12.6 billion for capital projects but spent only GH¢7.3 billion, representing a shortfall of 41.9 per cent.
Mr Dankwah observed that the largest spending gaps occurred in externally financed projects. According to the figures, only GH¢0.6 billion of a planned GH¢5.3 billion in foreign-financed capital expenditure was disbursed, reflecting an 88.3 per cent shortfall. This coincided with a significant slowdown in project loans and donor grants.
By contrast, domestically financed capital projects performed relatively better, with expenditure of GH¢6.7 billion, just 8.4 per cent below the programmed amount.
The policy analyst suggested that the government’s spending pattern may indicate an effort by the Ministry of Finance to reduce dependence on externally funded and debt-financed projects, particularly those requiring counterpart funding from the state.
”This suggests that the ministry is trying to reduce reliance on externally funded and debt-ridden projects with counterparty matching requirements,” he noted.
However, he cautioned that the strategy must be carefully balanced against the need to complete ongoing projects on schedule, warning that prolonged delays could significantly increase overall project costs.
”A lot of people have been complaining bitterly about donor-funded projects coming to a halt,” he said. “Yes, we are recovering from a big mess, but the government should open the wallet a little for projects that are important and not wasteful.”
Mr Dankwah’s remarks add to the growing debate over Ghana’s fiscal consolidation efforts, as government seeks to balance expenditure restraint with the need to sustain critical infrastructure and development projects across the country.
