Ato Forson credits ‘shock therapy’ for Ghana’s two-year stabilisation

Finance Minister Dr Cassiel Ato Forson has credited an aggressive fiscal adjustment programme with stabilising Ghana’s economy in two years, saying the government deliberately exceeded its primary surplus target to rebuild policy credibility. Speaking in an interview on Thursday after presenting the 2027 Budget to Parliament, he described the approach as “shock therapy”.

“I call it the shock therapy, to provide the necessary shock to the economy to stabilise something that ideally would have taken 10 years.” Dr Forson said the measures accelerated the recovery and gave the government room to focus on structural reforms and employment. He pointed to the 2025 fiscal outcome as evidence of the deliberate adjustment. Parliament had approved a primary surplus target of 1.5% of Gross Domestic Product, but he said the government achieved 2.5%.

“In 2025, the anchor, as approved by Parliament, was for me to do 1.5% of GDP primary surplus. I did 2.5% of GDP, and I said to the world that that is our down payment for policy credibility.” The minister was responding to concerns that reducing the primary surplus would leave a smaller fiscal buffer and require greater discipline in the coming years.

He argued that the additional adjustment in 2025 provided room to ease the position in 2027 without undermining stability. “So we saved 1% of GDP. Taking back 1% in 2027 would not harm the economy.” Dr Forson maintained that the government had done more than required because of the scale of the economic challenge. “We could do that in two years because of the measure, the menu of measures we had to push into the economy to restore stability that has been done.” However, he warned that stabilisation alone could not address the growing threat of youth unemployment.

According to him, 1.34 million young Ghanaians are neither employed, in education, nor in training, a group described as NEET. “This is a bomb waiting to explode.” He warned that the number could rise to about 1.7 million over the next four years without intervention. The minister said the government’s New Economy agenda would restructure the economy and direct investment toward employment opportunities.

“Our approach is to use this new economy to change the structure of the economy and invest in eight areas. This is where the jobs are.”