Months before returning to office, President John Mahama and the National Democratic Congress (NDC) consistently argued that excessive government spending was undermining Ghana’s economy by fuelling inflation and slowing development.
The party maintained that bringing inflation under control would reduce the cost of living, restore macroeconomic stability and create the fiscal space needed to accelerate infrastructure development across the country.
That message resonated with many voters, particularly in Greater Accra, where millions backed Mr. Mahama and the NDC in the 2024 general election.
Once in office, the government implemented the kind of fiscal restraint often advocated by finance ministries and international credit rating agencies. Public spending was tightened, disbursements were restricted, government accounts were consolidated and contractors awaiting payment for completed work were forced to wait.
From a macroeconomic perspective, the results appeared encouraging. Headline inflation fell from 23.5 per cent in January 2025 to 3.8 per cent by January 2026. Fuel prices declined, the cedi strengthened against the US dollar and key economic indicators pointed to improving stability.
However, beneath those gains lies a broader question: What was the cost of achieving them?
While the economic data reflected improving stability, events in Greater Accra highlighted the practical consequences of delayed public spending, particularly on critical infrastructure.
GARID: A project caught in fiscal restraint
One of the projects affected was the Greater Accra Resilient and Integrated Development (GARID) Project, a US$350 million World Bank-funded initiative launched under the Akufo-Addo administration to reduce flood risks, improve drainage systems, strengthen solid waste management and enhance emergency response in the capital.
Designed to tackle Accra’s recurring flooding challenges, the project reportedly became one of the casualties of government expenditure controls.
Although financing was available through the World Bank, implementation slowed as government cash releases were restricted.
In its May 2026 implementation update, the World Bank rated the project’s performance as “Moderately Unsatisfactory”, citing liquidity challenges linked to fiscal measures introduced by the Ministry of Finance during 2025 rather than a lack of donor funding.
According to the report, the Ministry of Finance also transferred GH¢13.8 million from the project’s account, while Interim Payment Certificates (IPCs) remained unpaid, leading to delays in construction works.
Following discussions with the World Bank, government later processed a US$10.5 million payment in February, returned the GH¢13.8 million to the project account and requested a reallocation of funds.
Even so, the World Bank concluded that while these measures had eased some liquidity constraints, they had not fully resolved the financing gap affecting implementation.
Floods expose the cost of delays
Just weeks later, on June 29, 2026, severe flooding struck parts of Greater Accra, displacing thousands of residents, destroying homes and businesses and claiming lives.
The flooding renewed debate about whether delays to major resilience projects may have weakened the city’s preparedness for heavy rainfall.
The situation also raises broader questions about the impact of expenditure controls on public infrastructure. If a donor-funded project backed by the World Bank experienced significant implementation delays despite available financing, concerns naturally arise over the pace of projects funded entirely through the Government of Ghana budget, including roads, hospitals and other essential public infrastructure.
Behind every delayed payment certificate are contractors, workers, suppliers and communities waiting for projects to be completed.
Balancing fiscal discipline with development
Few would dispute the importance of fiscal discipline or the need to reduce inflation. Stable prices strengthen purchasing power, improve investor confidence and support long-term economic growth.
However, fiscal consolidation also requires careful prioritisation to ensure that essential infrastructure projects continue without undue interruption.
Projects such as GARID, which are intended to protect lives and property from recurring floods, are widely regarded as strategic national investments rather than discretionary spending.
The challenge for policymakers is therefore not simply reducing expenditure, but ensuring that spending cuts do not undermine projects with significant social and economic benefits.
As recent events have shown, the cost of delaying critical infrastructure may ultimately be reflected not only in contractor claims and project cost overruns, but also in damaged communities, disrupted livelihoods and preventable disasters.
Macroeconomic stability is measured by more than inflation figures. It is also reflected in resilient infrastructure, functioning drainage systems, timely project delivery and cities that are better prepared to withstand increasingly severe weather events.