2027 Budget: Ato Forson has earned his chance to grow the economy

The 2027 budget, which the Finance Minister presents on Thursday, November 12, is expected to come with the unveiling of the “New Economy”, estimated to inject $10 billion over four years into critical sectors of the economy.

In 2025, I wrote that Dr. Ato Forson faced a choice between pushing for growth and protecting the stability that was only just emerging.

He chose stability, and I said it was the right call, but that the real test was what came next. In July, I made the same point about the Big Push, which he funded without front-loading. The New Economy is the logical next step to transition from stability to growth.

Before we get into it, let us look at the record that earned him the room to attempt this. In 2024, the government was running a primary deficit, spending more than it earned even before paying a cedi of interest.

By 2025, he had turned that around into a primary surplus of 2.6% of GDP. Based on IMF numbers, it is the largest primary surplus we have seen in at least 25 years. And he did this while clearing old debts. The government paid off GH¢23.7 billion in arrears in 2025 without building up new ones.

He also scrapped the E-Levy, the betting tax, the emissions levy and the COVID levy, while cutting effective VAT from 21.9% to 20%. In addition, he backed that discipline with a law that sets a floor of 1.5% of GDP for the primary surplus.

The results are there for all to see. We exited the IMF programme in July, rating agencies upgraded our credit, and inflation dropped from 23.8% at the end of 2024 to a low of 3.2% in March 2026, and stood at 5.5% in October. Under his watch, GDP also crossed $100 billion in nominal terms for the first time in our history.

To be fair, high gold prices and a strong cedi helped a lot. But the hard parts belong to him. Paying bills you could easily delay and writing a law against your own spending are things finance ministers usually avoid. Dr. Forson is proving to be the disciplinarian the economy needs.

Looking at IMF figures since 2000, we have managed a primary surplus in only four years: 2003, 2015, 2017, and 2025. And in every election year since 2004, the primary balance has been worse than the year before.

No finance minister in the Fourth Republic has held the line straight through an election. So here comes the challenge.

The New Economy is set to cost 1.5% of GDP every year from 2027 to 2030, targeting agriculture, energy, mineral processing, textiles and pharmaceuticals. Two-thirds of its funding will come from lowering the fiscal rule’s surplus floor from 1.5% to 0.5% of GDP.

The argument for spending is solid, though. Capital spending at 1.4% of GDP is far too low for a developing country, especially when a third of our young people aged 15 to 24 who want to work cannot find jobs. However, the real risk is the timing.

Lowering the floor just 19 months after passing the law could send mixed signals to financial markets. But so far, we haven’t seen much to worry about.  Going into Thursday, here is what I will be watching for.

First, we need a self-correcting trigger on the fiscal rule.

The relaxed floor should come with an automatic rollback to 1.5%, for example, if capital spending misses targets or new arrears begin to cross a set threshold.

Second, we need to measure the jobs the New Economy creates and be able to show they came from the program. Finally, state support to industries under the New Economy should follow actual output, with government paying private firms only after they deliver results.

If Dr. Cassiel Ato Forson creates verifiable jobs through the New Economy and holds this new fiscal rule firmly through the 2028 election, he will be the first finance minister in our modern history to fix a fiscal mess and expand the economy right through a full electoral cycle.

 

About the Author:

 

Salim Nuhu is an economist at a global e-commerce and technology company and a former World Bank economist. He holds a PhD in Economics from Michigan State University and a BA in Economics (First Class) from KNUST. He writes in his personal capacity. Contact: [email protected]