Economist Hails 2027 Budget as Blueprint for Structural Transformation

A leading economist has described the 2027 Budget as a refreshing and purposeful attempt to structurally transform the Ghanaian economy, praising the government's focus on macro stability, sharp reductions in interest rates, and the decision to channel savings into productive investments rather than wasteful spending.

In a post-budget interview with the Graphic Business on Friday, Professor Festus Ebo Turkson said the budget presented by Finance Minister Cassiel Ato Forson marked the first time in many years that a government was deliberately allocating resources to specific projects aimed at changing the structure of the economy.

"I am excited that, for the first time in so many years, we are seeing a government that is actually devoting money to specific projects to transform the structure of the Ghanaian economy," Prof. Turkson stated. "That is what we need to build resilience."

He noted that Ghana had faced three external shocks in the course of the year, yet the impact on the economy had been muted largely because of the macro stability currently being enjoyed. "At the centre of the resilience is macro stability," he said.

Strong Performance on Key Targets

Prof. Turkson highlighted that almost all the fiscal targets set by the government had been met. Inflation, he pointed out, had fallen below the lower bound of the target band (the mid-point of which was eight per cent), a development he described as "very refreshing."

Interest rates have also dropped to levels not seen in years. Banks are currently lending at between 12 and 12.5 per cent, compared with nearly 36 per cent only two to three years ago. Treasury bill rates, which once hovered around 30 per cent, now stand at about 4.5 per cent.

"You can clearly see that the government is doing something about making sure that the private sector will grow," he said. "In an economy where investors are borrowing at less than 10 per cent, it is reassuring because now they can get cheap credit. That also creates jobs."

The economist further commended the Finance Minister and the President for enforcing commitment controls that have generated significant savings. He cited the example of a commercial project—a road—that will be financed entirely from savings without any borrowing.

Shift to Domestic Borrowing and Private Sector Space

A key positive, according to Prof. Turkson, is the deliberate move away from foreign debt towards domestic borrowing at very low rates. He explained that the sharp depreciation of the cedi between 2020 and 2024 had automatically inflated the local-currency value of external debt even without new borrowing.

"One way for us to deal with our debt sustainability is to focus on domestic borrowing," he said. "The game changer is that the government is borrowing from domestic sources but actually keeping interest rates low—below five per cent. This time, because of the low Treasury bill rates, it is not crowding out the private sector."

Cheaper credit for businesses, he argued, supports investment and job creation, reinforcing the private-sector foundation of the 24-hour economy agenda.

New Economy and the 24-Hour Concept Are Complementary

Responding to critics who claim the government has abandoned the 24-hour economy and the 1-3-3 shift system, Prof. Turkson rejected the suggestion. He explained that the 24-hour economy is an enabling framework designed to support the private sector to produce around the clock, rather than a programme in which government itself directly creates three shifts.

"The government itself is not directly involved in the 24-hour economy as if it is part of the production environment. It is enabling the environment to allow the private sector to produce all around the clock so that it can increase employment," he said.

The new economic concept, he added, is the broader framework under which government is directly investing in transforming the productive structure of the economy—in pharmaceuticals, textiles and garments, light manufacturing, agro-processing, commercial farming, and tourism. The 24-hour economy is embedded within this larger structural transformation agenda; the two are complementary, not alternatives.

Initiatives such as the Gold Board, ongoing tax reforms, and the domestic refining of Ghana's crude oil are examples of structural change, even if they fall outside the narrow 24-hour economy definition.

$10 Billion Outlay Described as Realistic

On the realism of the approximately $10 billion capital outlay for the new economy over four years, Prof. Turkson said the Finance Minister had indicated that savings already made in 2026, together with further savings expected, would support annual spending of about $2.5 billion on structural transformation.

"That is very doable," he said. "It only tells you that we have wasted money in the past. What is even surprising is the fact that Ghana is able to really save money to pay for the investments coming up in 2027. We are ahead of schedule. We don't need to go outside to borrow money to develop the country."

He argued that borrowing for productive expansion should not be a source of worry because it expands output, creates jobs, and ultimately increases tax revenue. "You need to get people into jobs so you can tax them. That is how countries that have high tax revenue as a percentage of GDP do it."

Enabling Environment for Three-Shift Production

Prof. Turkson emphasised that the three-shift system will emerge organically once the business environment becomes conducive and demand for locally produced goods rises. Government is already taking enabling steps, including tax rebates on solar imports to lower energy costs, selective import restrictions to create demand for domestic producers, and tax rebates on machinery imports.

"These are all the enablers for the three shifts a day. This is not going to happen overnight. It takes time," he said, citing the multi-decade consistency of East Asian development experiences. "The fact that the economy is stable itself is a big, big push for that three shifts a day."

Call for Consistency and Balanced Discourse

While welcoming robust public criticism as healthy for democracy, Prof. Turkson insisted that the current trajectory is positive and relatively rare in recent Ghanaian history.

"There's a lot of good things happening now and we need to commend. If they don't do it well, we'll criticise. I'm always someone who will criticise when I have to and give the credit when I have to. I think what is going on currently is something that is refreshing. We've not seen that in a long time."

He urged the government to remain focused on macro stability and the structural transformation agenda, noting that difficult but necessary choices must be sustained if the economy inherited from colonial times is to be fundamentally changed.