Ghana’s government has made progress in achieving high levels of aggregate budget credibility. In recent years, the government has consistently met the overall total expenditure and revenue targets set out in the annual budget. Ghana’s central government spent an average of 98 percent of the total approved budget from 2017 to 2021. However, this achievement is undermined by larger deviations between budgets and actual expenditures observed within Ghana’s line ministries. Key social sector ministries, including the Ministry of Food and Agriculture (MoFA), Ministry of Water and Sanitation, and Ministry of Gender and Social Protection show higher spending deviations, underspending their revised budgets by 28 percent, 35 percent, and 19 percent, respectively, between 2018 and 2020.
Recurring deviations in social sector spending can undermine efforts to prioritize spending for the United Nations Sustainable Development Goals (SDGs). Shifts across sectors and ministries weaken the priorities set out by parliament in the country’s annual budget and can result in some sectors being deprioritized during budget implementation. A particular worry for sectors that chronically report underspent budgets is that key programs may be starved of resources, and services may fail to reach those who depend on critical government programs. The agriculture sector is of particular concern for the country; Ghana’s 2022 Voluntary National Review on the SDGs notes that, despite modest gains, food insecurity remains a challenge for Ghana and can be attributed to the government’s low prioritization of agriculture sector spending as well as inadequate investments to address food inflation and the decline in farm animal production.
This brief considers the budget credibility issues in Ghana’s agriculture sector by examining deviation trends in the overall MoFA budget as well as by economic classification of spending over a five-year period (2017-2021). The choice of expenditure categories for the study was informed by the publication of budget performance information for ministries, departments, and agencies, including MoFA targets and outcome indicators, in the Ministry of Finance (MoF) budget performance reports. This brief: 1) analyzes the reasons budget deviations have occurred and the impact of spending deviations on the delivery of programs within the agriculture sector; recommends reforms required to improve the credibility of MoFA’s budget; and 3) considers the impact of budget deviations on Ghana’s efforts to achieve SDG 2, which calls on governments to “End hunger, achieve food security and improved nutrition and promote sustainable agriculture”.
The study uses a mixed method approach, including document reviews (of budget statements, annual performance reports, and audit reports) and semi-structured interviews and key informant interviews with MoFA and MoF officials to learn more about the causes of the observed credibility challenges and how these impact agriculture sector outcomes.
This publication is a part of Exploring the Connections between Budget Credibility and SDG Implementation.