Ghana's Public Finances Stretched by Over-reliance on Consolidated Fund
Ghana's public sector planning suffers from a persistent weakness. Ministries and agencies too often turn to the taxpayer for funding. This overdependence on the Consolidated Fund for development projects is unsustainable and unnecessary. The instinct is to ask citizens to foot the bill for new ideas. If tax money falls short, borrowing becomes the next in line. Rarely are private capital or user fees seriously considered.
This habit strains the national budget significantly. Approximately 44% of Ghana's tax revenue goes to the public sector wage bill. Another 42% to 48% of government revenue pays for debt servicing. This means salaries and loan payments consume a huge chunk of public money. What remains must then fund roads, schools, hospitals, water systems, security, and agriculture.
Such expectations border on fantasy. Over the years, more than $1.5 billion has been borrowed for markets and sporting facilities. Some of these projects lie unused or abandoned. The real problem is opportunity cost. Money spent on these projects cannot be used for essential services or reducing debt. This makes relying solely on the Consolidated Fund hard to justify.
Many public projects could attract private investment. These projects could recover costs through user fees. This would reduce the burden on taxpayers and government borrowing. The issue is often a lack of imagination, not capital. It also stems from a reluctance to structure projects differently. This does not mean commercializing essential services like healthcare or security.
However, there is little reason to fund every project with taxpayer money. This is especially true if it can generate its own revenue. The regular consequence is overcrowded budgets. Projects face delays. Contractors go unpaid. National debt rises. Persistent fiscal pressure becomes the norm. The government should focus on regulating and facilitating. It should protect the public interest. It does not need to fund and own everything.
Every ministry, department, and agency must ask a crucial question. Before requesting funds from the Consolidated Fund, they should inquire: If private investors are willing to fund a project and users will pay for it, why should the taxpayer bear the cost? This question is vital for Ghana's future development. It goes beyond simple budgeting. It is a call for smarter financial planning.