This is the second of two reports commissioned by UNDP Ghana on fiscal space for human development. The report examines how Ghana can efficiently expand and leverage fiscal space to sustainably promote rapid, inclusive growth and accelerate progress towards the Millennium Development Goals (MDGs). The study notes that many of the problems that need addressing have intensified since the last analysis of fiscal space carried out in 2010, due to both external and internal factors.

Externally, the commodity “super-cycle” has ended, local and international confidence in the economy is declining, and there is a progressive reduction in development assistance now that Ghana is classified as a lower middle-income country (LMIC). Internally, rising inflation, growing inequality, delays in realizing the expected returns from the Jubilee oil field, continued low savings and investment, and persistently large budget and balance of payments deficits which have pushed Ghana’s debt to unsustainable levels, raise questions about the future sustainability of growth and development.