AfDB approves $10.4M grant to support Ghana’s public financial management systems

In a strategic move to strengthen economic governance and unlock more inclusive growth, the African Development Bank (AfDB) has approved a $10.41 million grant to support Ghana's public financial management systems—an investment aimed at improving how the country raises, manages, and deploys public resources.

The funding, sourced from the African Development Fund, will finance the Strengthening Institutions for Enhanced Financial and Economic Governance (SIEFEG) project—an ambitious initiative designed to modernise fiscal systems, enhance accountability, and embed climate and gender priorities into national planning.

From Stability to Transformation: Building on Strong Economic Gains

The approval comes at a time when Ghana is demonstrating notable macroeconomic recovery:

• GDP growth reached an estimated 5.8% in 2025, up from 5.6%

• Inflation dropped sharply to 3.3% in February 2026, below the central bank's target band

• The fiscal deficit narrowed to 2.4% of GDP, down from 6.3% in 2024

• Public debt declined significantly to 45.3% of GDP, from 61.8%

• The current account surplus widened to 4.4% of GDP, more than doubling from 2%

These improvements reflect stronger macroeconomic management and fiscal consolidation efforts, positioning Ghana as one of the more stable economies in West Africa.

However, the AfDB cautions that growth has yet to translate into broad-based prosperity, with unemployment and inequality remaining persistent challenges.

SIEFEG: A Next-Generation Governance Reform Programme

The SIEFEG project represents a next-phase governance intervention, building on an earlier AfDB-backed initiative launched in 2019. Its core objective is to transform public financial management into a driver of inclusive and climate-resilient growth.

The programme focuses on three key pillars:

1. Boosting Domestic Resource Mobilisation: Enhancing revenue systems to increase fiscal space without overburdening citizens

2. Strengthening Public Spending Oversight: Improving transparency, accountability, and efficiency in how public funds are allocated and monitored

3. Preparing Ghana's Next National Development Plan: Embedding gender equality and climate resilience into long-term economic planning

Targeting the Core of Government Systems

The project will deliver capacity-building and institutional strengthening across Ghana's most critical governance bodies, including:

• Ministry of Finance

• National Development Planning Commission

• Ghana Audit Service

• Public Procurement Authority

• Parliament and oversight committees

• Central Tender Review Committee

• Department of Gender

By reinforcing these institutions, the initiative aims to create a more coherent, transparent, and results-driven public finance ecosystem.

Unlocking Fiscal Space and Private Sector Growth

Beyond institutional reforms, SIEFEG is expected to generate tangible economic benefits by:

• Expanding fiscal space for priority investments

• Improving targeting of public expenditure

• Strengthening investor confidence

• Creating a more enabling environment for private sector growth and job creation

Experts note that improving governance systems can significantly increase the efficiency of public spending—ensuring that limited resources deliver maximum development impact.

Climate and Gender at the Core of Economic Planning

A distinguishing feature of the SIEFEG programme is its integrated focus on climate resilience and gender inclusion—areas increasingly recognised as critical to sustainable development.

The project will support:

• Climate-sensitive budgeting and policy design

• Gender-responsive planning and expenditure tracking

• Inclusion of vulnerable populations in development frameworks

This approach aligns Ghana's economic strategy with global sustainability goals while addressing domestic inequalities.

Aligning with Long-Term National and Regional Strategies

The initiative is closely aligned with Ghana's broader development agenda, including:

• Vision 2057, the country's long-term national development framework

• The Agenda for Jobs, focused on employment and economic transformation

It also supports the AfDB's strategic priorities, including:

• The Country Strategy Paper for Ghana (2024–2029)

• The Economic Governance Strategy (2021–2025)

• The Bank's overarching Ten-Year Strategy

Strengthening Resilience in an Uncertain Global Environment

As global economic uncertainty persists—driven by geopolitical tensions, climate risks, and financial volatility—the AfDB emphasises the importance of robust governance systems in safeguarding economic progress.

"By investing in governance systems today, we are supporting Ghana in building a more transparent, accountable, and resilient economy," said Lamin Barrow, AfDB Director General for West Africa.

A Model for Governance-Led Growth in Africa

The SIEFEG project reflects a broader shift in development strategy across Africa—placing governance, institutional strength, and policy coherence at the centre of economic transformation.

If successfully implemented, the programme could serve as a model for other countries seeking to translate macroeconomic stability into inclusive, sustainable growth.

For Ghana, the message is clear: strong economic fundamentals must now be matched by strong institutions to ensure that growth benefits all segments of society.