According to ISSER, government borrowing should be channelled into productive ventures capable of generating long-term economic returns rather than being used largely for recurrent expenditure and interest payments, as has been the trend in recent years.

Prof. Robert Darko Osei (second from left), Prof. Samuel Nii Ardey Codjoe (left) and other guests launching the report Photo: Ebo Gorman

This recommendation was contained in the 34th edition of ISSER’s flagship State of the Ghanaian Economy Report (SGER) 2024, which offers an independent and comprehensive analysis of the country’s economic performance across key sectors.

Speaking at the launch of the report in Accra yesterday, the Director of ISSER, Professor Robert Darko Osei, said Ghana’s economy was “on the mend,” but cautioned that the country was “not out of the woods yet.”

He called for prudent borrowing, preferably on concessional terms, and stressed the need for efficiency in public spending to enhance growth and job creation.

Prof. Osei noted that economic growth in the past two quarters of the year was largely driven by the industrial sector, particularly construction and gold mining.

He said growth projections for 2026 should be moderated in view of expected fiscal consolidation and limited fiscal space.

“Fiscal consolidation is happening in 2025. There were significant slippages in 2024, and that has implications for what happens next year. The government has been quite prudent so far, but we must be mindful of the costs associated with fiscal tightening,” he said.

He explained that while fiscal discipline was essential, it could come at the expense of growth if capital investment remained low.

He urged the government to prioritise spending on productive projects and improve the efficiency of procurement and investment decisions.

Prof. Osei emphasised the need to create fiscal space through improved domestic revenue mobilisation and reduced tax exemptions.

However, he cautioned that Ghana’s large informal sector and high inequality limited how much revenue could be generated from existing taxpayers, hence the need to broaden the tax base rather than overburden compliant citizens.

Commenting on Ghana’s macroeconomic stability, Prof. Osei said although the Cedi was performing well, inflation had fallen to single digits and reserves stood at around $12 billion, the gains must be consolidated even as the country prepares to exit the International Monetary Fund (IMF) programme in May 2026.

He recommended strengthening the Fiscal Responsibility Act and establishing a more empowered Fiscal Council to ensure long-term discipline.

“If managing public finances were easy, everyone could do it. But it requires balancing fiscal prudence with efficient spending,” he remarked.

On the global outlook, Prof. Osei said Ghana must brace for possible declines in commodity prices in 2026 but noted that such a development could have mixed effects.

He said while lower oil prices might reduce export earnings, they could also ease domestic inflation and fuel costs if gains were passed on to consumers.

On education, he said instead of the No Fee Stress Policy, the government should amend the Student Loan Trust Fund to allow first-year students to take loans.

On tourism, Prof. Osei called for a long-term tourism plan for the country.

On health, the Director of ISSER said the doctor-to-patient ratio improved from 1:4992 to 1:4333, while maternal mortality worsened, rising from 109 to 122 per 100,000 live births.

The Provost of the College of Education at the University of Ghana, Professor Samuel Nii Ardey Codjoe, who chaired the programme, commended ISSER for its continuous contribution to economic policy discussions.

He suggested that ISSER compile key lessons and themes from all past reports into a single publication to guide national policy formulation.

He also urged policymakers to look within for innovative solutions to Ghana’s development challenges amid growing global geopolitical uncertainties.

BY KINGSLEY ASARE & SARAH KWAKYE