2026 fiscal outlook positive – Stanbic Bank Economist Analysis

Ghana’s fiscal situation for 2026, though still facing pressures, looks more encouraging as to the mid-year revised budget for 2025.

This is according to an economic analysis by Jibran Qureishi, Head of Africa Research Economics at Stanbic Bank, who says the country is showing signs of fiscal improvement.

At first glance, the country’s budget deficit for 2026 appears to widen slightly, rising to 2.2% of GDP on a commitment basis, compared to 1.8% expected in 2025. But when compared to the figures adjusted mid-year in 2025, the deficit actually improves, dropping from 2.8% to 2.2%.

“The fiscal position looks more positive when comparing the FY2026 budget to the revised FY2025 budget numbers,” said Stanbic Bank’s Jibran Qureishi.

This trend holds even in the government’s cash flow projections. While the cash deficit is expected to widen from 2.8% in 2025 to 4.0% in 2026, the revised 2025 budget had projected a deficit of 3.8% — meaning the change is less dramatic than it appears on paper.

A major driver of this improvement is expected revenue. Total revenue and grants are expected to climb to GHS268 billion in 2026, up from an estimated GHS226 billion this year. Tax revenues alone could reach GHS224 billion, supported by reforms such as the reduction of the effective VAT rate from 21.9% to 20%, and a raise in the threshold for VAT registration, giving relief to small businesses.

Mr. Qureishi explains that these changes strike a delicate balance between increasing tax collection and easing the burden on businesses. “Tax mobilisation remains strong as the primary driver of revenue growth, but reforms like reducing the VAT rate and increasing the registration threshold are aimed at supporting SMEs while broadening the base,” said Jibran Qureishi.

Still, some uncertainty remains. With spending expected to rise to GHS302.5 billion in 2026, and interest payments ballooning to nearly GHS58 billion, Ghana must thread the needle carefully to avoid fiscal strain. But Qureishi remains cautiously optimistic:

“The data suggests that Ghana is improving its fiscal position in a responsible way, even if some risks such as delays in tax reform or revenue shortfalls, still exist,” he added.

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