Budget 2026 marks shift from austerity to expansion – Frank Bannor

An economist and senior lecturer at the Ghana Institute of Management and Public Administration (GIMPA), Frank Bannor, says the 2026 Budget signals a major policy shift from the contractionary stance of the previous year to a more expansionary and growth-driven posture.

Speaking on the Asaase Breakfast Show on Friday (14 November), Bannor contrasted Budget 2026 with the 2025 fiscal plan, which he described as “highly contractionary”, marked by sweeping cuts across ministries, district assemblies and critical economic sectors.

Last year’s cuts, he argued, contributed significantly to the slowdown in industries such as construction and manufacturing.

“The government did not release funds adequately in 2025. District assemblies, MPs and MDAs [ministries, departments and agencies] all suffered. This is why sectors like construction fell from 9.6% growth to about 2.9%,” Bannor said.

All in the timing

According to Dr Bannor, the new budget takes a different approach, signalling government’s willingness to “spend its way into recovery” by committing GHC32 billion to capital expenditure.

He described the shift as both necessary and overdue, given the sharply declining output in key sectors.

“Compared to 2025, the new Budget looks more progressive in terms of spending. The government is showing readiness to commit to capital expenditure, and if these releases are actually made, we should expect some rebound in 2026,” he explained.

Bannor, however, cautioned that credibility will depend on consistent and timely disbursement – a challenge that has marred previous budgets.

He noted that Parliament has repeatedly questioned the government’s failure to release approved funds, which undermines planned development outcomes.

Implementation crunchpoint

The economist also weighed in on broader macroeconomic assumptions, saying the projected recovery will rely heavily on government’s ability to stimulate productive sectors while managing debt and maintaining fiscal discipline.

“It’s an expansive budget, but the real issue is implementation,” Bannor said.

“If the government follows through, especially on capital expenditure, the economy could see meaningful improvements. But if releases stall again, we will face the same declines we saw last year.”

Dr Bannor concluded that while Budget 2026 presents a more optimistic pathway, its success will depend on transparency, improved public financial management, and the government’s commitment to avoid the delayed disbursements that crippled 2025.