Population surge threatens Ghana’s fiscal stability — IEA
The Institute of Economic Affairs (IEA) has cautioned that the nation’s rapidly growing population is putting immense pressure on government finances and undermining efforts at fiscal consolidation.
From a population of 6.7 million in 1960, Ghana’s numbers have now surged past 34 million in 2025, intensifying demand for schools, hospitals, housing, roads and other critical infrastructure.
According to the IEA, these structural pressures make it nearly impossible for the government to drastically cut spending without crippling essential services.
The Board Chairman of the IEA, Dr Charles Mensa, stressed that Ghana’s fiscal challenge is less about excessive spending and more about weak domestic revenue mobilisation.
“Our expenditure will keep on growing, and it should grow as a people. We started with five million people during the days of Nkrumah and today we are 33 million people. We need to build more roads, more hospitals, more schools. So, when I hear people say cut expenditure, I ask: which one should we cut?” he questioned.
Stronger Ownership of Natural Resources
Dr Mensa argued that the long-term solution lies in increasing Ghana’s control over its natural resources to boost revenue flows and reduce reliance on external borrowing.
“Our best way forward is to own our resources. Until we own our resources it is going to be very difficult to generate enough revenue to meet our growing expenditure,” he said.
IMF and World Bank Conditions
While neither the International Monetary Fund (IMF) nor the World Bank has issued explicit directives for Ghana to slash expenditure, their financial assistance is tied to strict fiscal discipline.
The IMF’s Extended Credit Facility (ECF) and World Bank-backed programmes require Ghana to implement fiscal adjustments to stabilise the economy and rein in rising debt.
Already, the government has taken symbolic steps towards expenditure rationalisation, such as capping ministerial appointments at 60 and limiting non-essential foreign travel.
But experts warn these measures, though helpful, are insufficient in the face of the country’s surging population and growing social demands.
The IEA concluded that without sustainable domestic revenue mobilisation and greater control of natural resource earnings, the nation risks a persistent cycle of borrowing to fill fiscal gaps. This, it warned, could undermine long-term economic stability.
