Ghana’s government is moving to slash public spending in 2025 in a bid to curb mounting debt and restore fiscal stability, but the austerity measures could stall job creation, delay infrastructure projects, and strain essential services, according to Dr Daniel Amateye Anim, Chief Economist at PIED Africa.
Speaking to The High Street Journal, Dr Anim acknowledged the fiscal urgency behind the decision but warned of its immediate socioeconomic toll.
“Fewer roads will be built, fewer contracts awarded, and less money will circulate locally,” he said, stressing that reduced infrastructure investment could lead to job losses across construction, engineering, and supply chains, with ripple effects on manufacturers, transporters, and service providers.
Public services may also feel the squeeze, with delayed hospital and school projects leaving citizens reliant on already overstretched facilities.
Anim emphasized that these cuts are driven by Ghana’s restricted access to international credit markets, which remain largely closed due to high debt levels. “Global capital markets are essentially closed to us,” he explained, adding that fiscal tightening remains the government’s main lever to rein in inflation, stabilize the cedi, and reduce rising interest payments.
While these austerity measures may pave the way for economic recovery by 2026, Anim warned that the immediate sacrifices for ordinary Ghanaians will be significant. “It won’t bring immediate relief to those needing jobs, roads, or better services,” he noted.
He urged the government to pair spending cuts with transparency and social protections to soften the blow on vulnerable citizens. “Success in 2026 could mean renewed spending and opportunity if stability is achieved now,” Anim said, framing the policy as a difficult but potentially pivotal step toward long-term economic recovery.
About The Author
