Dr Amin Adam Accuses Government of “Fiscal Deception”, Says 2025 Investment Cuts Cost Ghana $1.1bn in Lost Growth
Former Minister for Finance, Dr Amin Adam, has criticised the government for what he describes as systematic under-execution of public investment, arguing that the practice has undermined growth, weakened job creation, and exposed deep fiscal fragilities in the economy.
Addressing the press on Friday, November 2025, on the Minority’s preliminary assessment of the 2026 Budget and Economic Policy, Dr Adam said the Finance Minister’s portrayal of Ghana’s 2025 fiscal outturn as prudent and consolidated masks a more troubling reality.
According to him, Parliament approved capital spending equivalent to 1.5% of GDP, yet government has implemented only about 0.5% year-to-date.
“Even this, we can challenge it as it may have been inflated. But for a government that seems to want to shift the fortunes of Ghanaians with its so-called ‘Big Push’, this is heartbreaking,” he said.
He noted that the 1-percentage-point under-execution — amounting to nearly US$1.1 billion in foregone public investment — did not arise from efficiency gains but from cash rationing, auction shortfalls, and rising debt service pressures.
“In reality, the Minister’s approach to fiscal management is not disciplined; it is reactive, relying on short-term cuts to maintain the appearance of order, and this is very dangerous for our medium-to-long-term development.”
Using Ghana’s macroeconomic parameters and IMF-consistent multipliers, Dr Adam outlined the estimated economic impact of the investment cuts:
Effective demand reduction: 0.514% of GDP
GDP impact: about 0.41% of GDP (≈ US$469 million)
Revenue loss: roughly US$75 million
Forgone potential growth: around 0.1 percentage points annually.
“The government has effectively traded tomorrow’s output for today’s optics,” he stated.
He warned that every one-percentage-point cut in public investment results in thousands of construction and supply-chain jobs not created, stalled road and school projects, and mounting arrears to contractors. He added that the cuts also constrain SMEs and weaken future tax revenues.
Dr Adam further argued that although Ghana recorded 6.3% real GDP growth in the first half of 2025, the trend is misleading, as the composition of growth remains heavily skewed toward services — including ICT, finance, and trade — while construction and manufacturing continue to lag.
“The government is not building the economy’s productive base,” he stressed.
He also pointed to crowding-out concerns, noting that banks prefer to invest in short-term government securities rather than extend long-term credit, worsening the cycle of high interest rates, low investment, and weak job creation.
The former Finance Minister criticised what he described as persistent non-release of budgeted funds in both the 2025 Budget and Mid-Year Review.
“Allocations for capital expenditure and goods and services remain unreleased. Workers across the public sector are paid but not given the necessary tools and inputs to work. Some ministries do not have basic things and are unable to provide fuel for government work. This is true fiscal indiscipline.”
He cited figures from the 2026 Budget to illustrate the government’s inability to implement its own programmes. For Q1–Q3:
Goods and Services: GHS3.8 billion spent out of GHS5.1 billion programmed (56% of annual allocation).
CAPEX: GHS11 billion released out of GHS26.6 billion programmed (34% of the GHS32.6 billion annual allocation).
He described these as evidence of “systematic and deliberate under-execution of growth-enhancing public investment,” driven by revenue shortfalls, under-subscribed auctions that force reliance on short-term T-bills, and rising interest costs that crowd out development spending.
“By cutting investment to meet short-term cash targets, the government is treating liquidity symptoms rather than addressing structural weaknesses in revenue and debt management.”
He warned that when capital projects stall, contractor arrears rise, SME liquidity weakens, and bank non-performing loans increase — translating short-term fiscal ‘savings’ into medium-term economic losses.
“The government has effectively chosen accounting aesthetics over economic substance,” Dr Adam said. “The Minister has weaponised underspending as a tool of false prudence. By systematically failing to release funds for approved projects, the Minister is creating artificial savings that mask his inability to mobilise revenue or manage debt sustainably. This is not fiscal discipline; it is fiscal deception.”
