Mahama’s Fuel Allowance Cuts Could Save GHS 121m in Four Years
President John Mahama’s directive to scrap fuel allowances for political appointees could save Ghana over GHS 121 million in four years, Economic Policy Advisor to the Vice President, Dr. Sharif Mahmud Khalid, has disclosed.
Speaking on PM Express, Dr. Khalid revealed that the savings projection is based on conservative calculations using vehicle fuel consumption estimates and current pump prices.
“Ballpark, this is what I did in the studio using GOIL’s figures,” he stated, explaining that his estimates assumed 1,000 government vehicles—comprising 500 saloon cars and 500 4x4s—each consuming an average of 50 litres of petrol weekly.
“If you crunch the numbers a bit… on average, the government will be saving probably about a total of GH¢2.5 million plus a month and GH¢30 million plus a year,” he noted. “In four years, we’re probably talking the government saving GH¢121 plus million.”
Although the actual size of the government fleet may exceed 1,000 vehicles, Dr. Khalid emphasised that the assumptions were deliberately modest to present a realistic scenario.
He stopped short of indicating how government intends to spend the savings, but highlighted several possible uses for the funds, including investments in healthcare and education infrastructure.
“A maternity block for a hospital or clinic costs probably about GH¢1.5 million… we could probably get an average of 81 of them out of the savings,” he said.
Dr. Khalid added that the same amount could also finance the construction of “303 CHPS compounds” or “121 six-unit classroom blocks,” based on an average unit cost of GH¢1 million.
“These were things I think we could do before we actually want to say whether it’s a PR gimmick or not,” he said, addressing scepticism about the policy’s real impact.
According to him, the goal is to present a full picture of the potential fiscal space such austerity measures can create, adding, “I’m not saying this is what the government is doing. I’m just trying to give the holistic picture of what expectations we could have, and the savings we could make if we actually adhere to this policy.”
President Mahama’s announcement marks a significant step in the administration’s effort to trim government expenditure and boost fiscal discipline ahead of the 2026 general elections.
