Large financing needs and debt-servicing costs could limit public investment and social spending in Ghana and three other African countries, the World Bank has warned.
Kenya, Malawi and Zambia are the other three nations.
According to the Bretton Woods institution October 2026 Africa Economic Update, the weaker-than-expected revenue mobilisation may require additional fiscal adjustment.
More broadly, it said fiscal consolidation efforts across the Africa region could dampen growth if accompanied by cuts in infrastructure spending or delays in critical development projects.
“Although inflation has moderated across much of the region, it remains susceptible to exchange rate depreciations, food price shocks, and fiscal slippages, particularly in countries with elevated debt levels and limited policy buffers”, the World Bank mentioned.
It added that persistent inflationary pressures could slow or reverse monetary easing, weighing on credit growth, private investment, and domestic demand. “In this context, preserving central bank independence and avoiding monetary financing of fiscal deficits remain critical to maintaining price stability and anchoring inflation expectations”.
The World Bank continued that several governments in Sub-Saharan Africa have undertaken politically difficult reforms in recent years, including fuel subsidy removal, exchange rate liberalisation, fiscal consolidation, and efforts to strengthen domestic revenue mobilisation.
However, sustaining this reform momentum may become more challenging ahead of elections or periods of heightened political contestation, particularly as households continue to face elevated costs of living.
It pointed out that the risks extend beyond a temporary slowdown in reforms. As such, if difficult policy measures do not generate tangible improvements in economic conditions within a reasonable timeframe, or are perceived as ineffective, public support for reform efforts may weaken substantially.
“This can erode not only the momentum behind current initiatives, but also the willingness of governments and citizens to pursue similar reforms in the future”, it added.
Ghana’s fiscal deficit to Gross Domestic Product on cash basis stood at 0.6% as of July 2026.
However, this could increase substantially due to the risks to the fiscal outlook.
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