Rising population makes expenditure cuts unrealistic – IEA

Ghana’s fast-growing population is tightening the fiscal space and complicating government efforts to implement meaningful spending cuts, the Institute of Economic Affairs (IEA) has warned.

The country’s population has surged from 6.7 million in 1960 to over 35 million in 2025, sharply increasing the demand for schools, hospitals, roads, and other essential infrastructure. According to the IEA, these structural pressures mean any attempt to drastically cut expenditure would undermine critical social and economic services.

Board Chairman of the IEA, Dr. Charles Mensa, stressed that the long-term solution lies in boosting domestic revenue rather than pursuing austerity.

“Our expenditure will keep on growing and it should grow as a people. We started with 5 million people during the days of Nkrumah and today we are 33 million people. We need to build more roads, more hospitals more schools so when I hear people say cut expenditure; I ask which one should we cut?” he said.

He further underscored the need for Ghana to secure stronger ownership and control of its natural resources to strengthen revenue mobilisation and reduce dependence on debt.

“Our best way forward is to own our resources. Until we own our resources it is going to be very difficult to generate enough revenue to meet our growing expenditure.”

While the IMF and World Bank have not explicitly directed Ghana to slash spending, their financial support is tied to strict fiscal discipline. Ghana is currently under the IMF’s Extended Credit Facility (ECF) and World Bank-backed programs, which require expenditure optimisation to meet economic stabilisation goals.

The government has already signalled its commitment to rationalising spending by capping ministerial appointments at 60 and restricting non-essential foreign travel.