Accra: The former Director of the Institute of Statistical, Social and Economic Research (ISSER), Professor Peter Quartey, has voiced concerns over the government's expenditure cuts in the first half of 2026, describing them as 'excessive'. He warned that while fiscal discipline is essential for macroeconomic stability, it should not come at the expense of critical development projects.
According to Ghana Web, Prof Quartey emphasized that reducing public spending by more than 20 percent exceeds what is considered prudent. Speaking at ISSER's review of the 2026 Mid-Year Budget Review and Economic Policy of the Government in Accra, he noted that a deviation of about five percent from planned expenditure is acceptable. However, the current 20.6 percent reduction could jeopardize investments in essential public services and infrastructure. He highlighted the potential impacts on roads, sanitation, and flood management, suggesting that such stability measures are excessive.
Prof Quartey likened the situation to a medical prescription, stating that while some adjustment is necessary, excessive measures could lead to new issues. He cautioned against pursuing "excessive stability" and advocated for a more balanced approach.
Government expenditure for the first half of 2026 was GHS136.9 billion, compared to a target of GHS172.5 billion, marking a 20.6 percent shortfall. This reduction was primarily due to lower-than-expected debt service payments, delays in capital expenditure for the 'Big Push' projects, and revenue shortfalls from earmarked funds. Capital expenditure experienced the steepest decline, dropping by 41 percent from the target. Interest payments and grants to other government units also fell short of targets by 24 percent and 16 percent, respectively.
On the revenue front, total revenue and grants recorded GHS124.8 billion against a target of GHS126.1 billion, representing a marginal deviation of 1.03 percent. However, oil and gas receipts missed the target by 31 percent, and non-oil non-tax revenue fell by 11 percent. Notably, other revenue categories exceeded their targets by 56 percent.
Prof Quartey also expressed concerns about the financial strain posed by some state-owned enterprises (SOEs) that continue to incur losses despite significant public support. He criticized inefficiencies in property rate collection, citing the Auditor-General's report, which revealed that expenditures on collection exceeded the revenue generated.
Dr. Kwame Adjei-Mantey, an ISSER Research Fellow, highlighted property rates and SOE reforms as key opportunities for increasing domestic revenue. He called for clearer institutional responsibilities and stronger capacity for local authorities to enhance revenue mobilization. Dr. Adjei-Mantey emphasized that optimizing property taxation could provide a sustainable source of domestic revenue to support national development.