2027 Budget review: The ten-billion-dollar question for next Thursday

On Thursday, 12 November, the red dispatch box will return to the floor of Parliament for the reading of the 2027 Budget.

Ahead of that presentation, consider this a diagnostic preview of the government’s flagship economic pitch. To ground it in hard data rather than political rhetoric, I am prefacing this analysis with a sobering twenty-five-year time series calculated by Professor Fred M Dzanku from Bank of Ghana records.

Take a close look at the attached chart before Thursday’s speech begins.

For a quarter-century, Ghana has sung the praises of agriculture at every budget reading and campaign rally. Yet over that exact twenty-five-year span, agriculture’s share of formal commercial bank credit has ranged between 3 per cent and 13 per cent, averaging a meagre 5.7 per cent.

If agriculture received bank credit matching its weight in our economy, that red line on Professor Dzanku’s chart would sit at 100 per cent. We have never once touched 37 per cent.

At the close of 2025, agriculture generated 22.8 per cent of our GDP and employed a third of our workforce. Yet it received just 4.3 per cent of commercial bank loans. Even at our own state-owned Agricultural Development Bank (ADB), less than 30 per cent of the loan book went to agriculture.

The twenty-five-year ledger has exhausted both the topsoil in the middle belt and the old alibis in Accra.

For years, the polite explanation was that high inflation, punitive Treasury bill rates, and unpaid government arrears were crowding out farms and factories. Fix the macroeconomy and pay down state arrears, we were told, and bank credit would naturally flow to producers.

Between March 2025 and October 2026, we ran that exact experiment in real time.

And credit where it is due: the Ministry of Finance, Ghana and the Bank of Ghana delivered on macro stability and arrears.

Inflation dropped to 5.2 per cent. The central bank cut the policy rate in half, from 28 per cent down to 14 per cent. Average commercial lending rates fell below 16 per cent. Even better, after auditing GH¢68 billion in legacy claims, the Finance Minister paid down nearly GH¢13.8 billion of arrears in 2025, programmed another GH¢25 billion for clearance in 2026, brought School Feeding caterer payments up to date, and tightened commitment controls.

Commercial banks responded to that breathing room by pumping nearly GH¢33 billion in fresh credit into the economy, pushing total loans to GH¢128.3 billion by August 2026. Because government cheques were finally clearing, bad loans across the wider banking industry fell from 21.8 per cent in 2024 down to 15.7 per cent.

Yet where did that GH¢33 billion tsunami of new credit actually go?

It went straight to services, short-term commerce, and import trade. While banks were flush with cheaper money, agriculture’s slice of total credit actually shrank further, dropping from 4.3 per cent to 3.1 per cent by August 2026. And while contractor and service defaults fell as government cleared its bills, agriculture was the solitary sector where loan defaults spiked, climbing to a staggering 60.9 per cent.

Clearing macro arrears and cutting interest rates lowered the price of money. It did not change the physics of agricultural risk.

Follow two loan files onto a commercial bank credit committee’s desk, and the divergence makes complete sense.

The first file belongs to an importer bringing containerised frozen poultry or packaged rice through Tema Port. The cash cycle is ninety days. The cargo sits in a bonded warehouse under dual lock. Every shipping manifest and customs entry is digitised. If the borrower stumbles, the bank can liquidate the inventory within a month and recover its principal.

The second file belongs to a maize aggregator in Techiman or an oil palm processor in Kwaebibirem seeking five-year capital. Less than 3 per cent of our farmland is irrigated. When planting-season rainfall fell 25 per cent below normal in 2025, entire harvests were wiped out. Forty per cent of feeder roads turn to mud during harvest. Land titles sit in contested paper registries. And while school feeding caterer payments improved, institutional food suppliers under Free SHS were still chasing GH¢250 million in unpaid bills as recently as October.

No credit officer is going to bet ninety-day customer deposits on a five-year plantation or a three-shift garment factory when six out of every ten agricultural loans are already in default.

We do not starve agriculture and manufacturing because they default. They default because we starve the physical and digital infrastructure that makes them bankable.

Next Thursday, Dr Cassiel Ato Forson will unveil the US$10 billion "New Economy" programme for 2027 to 2030. To fund its seven pillars, led by commercial agriculture, oil palm, pharmaceuticals, and textiles, the government plans to trim our statutory primary fiscal surplus target under the Public Financial Management Act (Act 1136) from 1.5 per cent of GDP down to 0.5 per cent.

Loosening a nineteen-month-old fiscal rule is a serious bet with our hard-won fiscal credibility.

If that fiscal space is spent the old way, handing out seedlings, tractors, and contracts through ministry committees, the money will evaporate just like the flagships before it. Over the last twenty-five years of industrial slogans, manufacturing’s share of bank credit has fallen by more than half, from 25 per cent in 1999 to just 10.5 per cent. Meanwhile, GIRSAL, our agricultural risk-sharing facility, has guaranteed just GH¢300 million a year over six years. That is less than 0.3 per cent of our banking loan book.

If the US$10 billion New Economy is going to bend Professor Dzanku’s curve upward, Thursday’s budget must pass four simple tests:

First, stop direct ministry lending. Channel at least 70 per cent of productive funds through the Development Bank Ghana (DBG) and GIRSAL as first-loss guarantees and irrigation capex, requiring every GH¢1 of public money to crowd in at least GH¢3 of commercial bank credit.

Second, fix the 60.9 per cent default trap at its root. Tie agribusiness support strictly to irrigation, parametric weather insurance, and electronic warehouse receipts on the Ghana Commodity Exchange, while extending the recent discipline in contractor arrears clearance to every downstream food buffer and school supply contract.

Third, power the 24-Hour Economy (Act 1164) before taxing it. A pharmaceutical or garment factory cannot run night shifts on coughing diesel generators. Exempt or defer import duties and upfront VAT on commercial solar inverters, battery storage, and factory tooling at Tema Port.

Fourth, build the invisible digital spine as a true public good, not a tollbooth. Digital Public Infrastructure is missing from the New Economy's seven pillars. Yet, no bank can cheaply price loans for ten thousand smallholders or SMEs without linking the Ghana Card, digital land registries, and GRA e-invoicing into an open credit-scoring rail. That makes the ongoing National Data Exchange (NDX) architecture work under the Ministry of Communication, Digital Technology and Innovations deeply consequential. It must be built to serve citizens and businesses cheaply and efficiently, rather than becoming another revenue-extractive channel where per-query verification fees inflate the cost of credit, business compliance, and state services.

Every budget speech promises a new economy. The beauty of Professor Dzanku’s chart is that the ratio cannot be spun.

Moving agriculture’s credit parity ratio from 14 per cent toward 50 per cent by 2030 will not happen simply because the state loosened its fiscal rule to spend $10 billion. It will happen the day we make a farm in Techiman as bankable on a credit committee's balance sheet as a shipping container at Tema.

Happy Saturday. When the red dispatch box opens on Thursday, what single line item will you be watching?

Solutionist | Systems Architect | Tech Policy & Critical Infrastructure.