Ghana’s government is increasingly turning to borrowing to finance critical national programmes, including education, as persistent revenue shortfalls widen the fiscal gap.
Dr Gideon Boako, Deputy Ranking Member on Parliament’s Finance Committee, highlighted the structural pressure on public finances, noting that domestic tax collections have failed to keep pace with spending obligations.
The reliance on debt to fund recurrent and developmental expenditure underscores the fragility of Ghana’s fiscal position.
With revenue streams underperforming, the government faces a difficult trade-off between maintaining essential public services and managing the growing debt burden.
This dynamic risks accelerating the debt-to-GDP ratio, potentially crowding out private sector investment and increasing vulnerability to external shocks.
The situation mirrors broader challenges across emerging markets, where fiscal expansion and inflationary pressures have forced sovereigns to tap capital markets more aggressively.