Fiscal Reform: Ghana Spent Twice as Much on Education in 2024 As Nigeria

Reducing Ghana's Ministries Will Not Improve the Country's Fiscal Position as Spending Is Concentrated in Education and Health

fiscal reform

Ghana’s Ministry of Education budget for 2024 was double that of Nigeria’s Federal Ministry of Education, according to a recent analysis by Ghanaian political economist Bright Simons. Even when public spending on education by Nigeria’s states is taken into account, Ghana in 2024 spent more on education than its larger West African neighbour, despite Nigeria’s significantly larger population.

Bright Simon made the comparison while arguing that the plan to reduce the number of ministries in Ghana by the newly elected President, John Mahama, does not amount to genuine fiscal reform as the ministries of Health and Education account for the bulk of public spending in Ghana.

Ghana, with an estimated population of 34 million, allocates approximately $2.81 billion to education annually, representing over 20% of its national budget. In contrast, Nigeria, home to an estimated 223 million people—more than six times the size of Ghana’s population—allocates around $1.91 billion to its federal education ministry.

The disparities extend beyond budgets to educational outcomes. Nigeria faces a severe out-of-school crisis, with approximately 10.5 million children not attending school, according to UNICEF. In Ghana, while the issue is less pronounced, an estimated 995,000 children were out of school as of 2021, highlighting that even with larger spending, challenges remain.

 

Genuine Fiscal Restructuring Or Mere Symbolism?

This revelation comes during a period of significant governmental restructuring in Ghana. President Nana Addo Dankwa Akufo-Addo recently reduced the number of ministries from 30 to 23, presenting it as a cost-saving reform and part of his campaign to streamline governance. However, Simons and other experts argue that such reforms are more about “public sentiment reading” than genuine financial efficiency.

“Cutting ministries often generates public approval but rarely results in measurable fiscal savings,” Simons said. For meaningful cost reductions, the thousands of staff members from dissolved ministries would need to leave government payrolls entirely rather than being redistributed across other agencies, which is the current practice.

The Real Fiscal Iceberg: State-Owned Enterprises

The ministry cuts are minor compared to the broader public expenditure landscape. An estimated 98% of public sector workers and the bulk of government activity remain in agencies and state-owned enterprises (SOEs), which continue to dominate fiscal outlays. Large institutions like the Ghana National Petroleum Corporation (GNPC) and the Electricity Company of Ghana (ECG) account for much higher spending inefficiencies than many smaller ministries combined.

In fact, Simons notes that previous attempts to reduce the number of ministries resulted in no significant drop in the Office of Government Machinery budget, the central administrative unit overseeing public expenditure.

“Ministerial budgets themselves are a hotchpotch,” Simons observed. “The Ministry of Chieftaincy and Religious Affairs receives less than $5 million a year, while the Ministry of Parliamentary Affairs operates on a budget as small as $600,000. These ministries are often titles dressed up as organisations rather than operational cost centres.”

The True Spending Giants: Health and Education

In contrast, the so-called “giant ministries” such as Health, Education, Roads & Highways, and the Interior drive Ghana’s public expenditure. Education alone commands a staggering $2.81 billion annually, accounting for over 20% of the national budget, making it the largest single expenditure item. The Ministry of Health also receives around $1 billion annually.

To put this into perspective, even if Ghana were to fully dissolve five smaller ministries, the financial impact would be negligible compared to the scale of the education and health budgets. “The focus should be on reforming high-expenditure ministries like Education and Health,” Simons said, “as they eclipse any potential savings from merely renaming or merging ministries.”

Comparing Nigeria’s Fiscal Struggles

Nigeria’s lower education spending is not just a matter of policy choices but also revenue constraints. Despite its massive population, Nigeria’s federal education allocation of $1.91 billion falls far behind Ghana’s per capita spending. Economists I.C. Nwaogwugwu and C. Ighodaro (2023) note that Nigeria’s limited fiscal capacity stems from a weaker tax base and disputes over revenue-sharing mechanisms like the Value Added Tax (VAT).

“Revenue generation challenges, particularly weak compliance and enforcement mechanisms, make it difficult for Nigeria to expand social investments despite its larger size,” they wrote in a recent analysis of Nigeria’s budgetary policy.

Fiscal Sustainability Concerns

Ghana, despite its more substantial education budget, is not without challenges. The nation continues to grapple with high public debt levels, raising concerns about long-term fiscal sustainability. Public finance expert O. Onike (2022) warned that Ghana’s rising debt burden could strain resources for other critical development areas, making the current education spending difficult to sustain without deeper structural reforms.

Similarly, E. Awotwe et al. (2020) highlighted that while Ghana’s investment in education has improved literacy rates, inefficiencies in administrative management and financing structures could undermine long-term development gains.

The Path Forward: Efficiency Over Symbolism

While Ghana’s decision to reduce the number of ministries has symbolic value, Simons and other experts emphasise that the real cost savings lie in improving operational efficiency rather than eliminating ministerial titles. Without reforms addressing public sector redundancies, procurement inefficiencies, and SOE management, long-term fiscal stability will remain elusive.

As both Ghana and Nigeria continue to navigate complex fiscal landscapes, experts agree that deeper structural reforms in public finance management—particularly around health and education spending—are critical for sustainable development and human capital advancement in the region.

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