The GH¢10.4 Billion Question: What Ghana's budget audit reveals about institutional decay

Ghana's 2026 Budget Statement contains a revelation that has received insufficient attention: an independent audit commissioned by the Auditor-General, working with PwC and EY, rejected GH¢10.4 billion in arrears claims inherited from the previous administration.

To grasp the magnitude, consider what that sum could have built: 57 modern district hospitals, or 208 fully-equipped boarding senior high schools, or 1,040 kilometres of urban dual carriageway roads.

The figure, GH¢10.4 billion, represents a phantom debt burden that has been left to strangle Ghanaians. It represents a cruel deal of untold hardship on the citizens. It exposes systematic institutional failure in public expenditure control that spirals uncontrollably consuming anything on its path.

The current government encountered outstanding arrears totalling GH¢68.8 billion. The audit validated GH¢47.8 billion as legitimate obligations. However, GH¢10.4 billion was rejected due to unsupported documentation, duplicate payment certificates, inflated invoices, falsified stores receipts, and instances where no work was done. Of this, GH¢1 billion comprised bank transfer advice already approved and ready for payment.

The implications extend beyond immediate fiscal savings. This audit reveals what happens when commitment control systems fail and payment verification becomes perfunctory. The rejected claims represent contractors who submitted fraudulent documentation, civil servants who approved payments without proper verification, and institutional mechanisms that permitted systematic abuse.

The opportunity cost demands examination. GH¢10.4 billion could fund three district hospitals, ten boarding secondary schools, and fifty kilometres of urban roads in each of Ghana's sixteen regions. Alternatively, it could build sixteen teaching hospitals, one for every region. Or five comprehensive universities. These are not abstract figures. They represent classrooms that will not be built, hospital beds that will not exist, roads that will remain impassable, students who will lack facilities, patients who will travel further for care.

Consider the mechanics. Duplicate payment certificates suggest contractors billed multiple times for single contracts. Inflated invoices point to collusion between contractors and certifying officers. Falsified stores receipts mean goods never delivered were certified as received. Claims for work not done represent pure fabrication.

The GH¢1 billion in bank transfer advice ready for payment underscores how close this exploitation came to success. These claims had passed through the system, received approvals, and awaited only final disbursement.

The previous administration accumulated these arrears whilst publicly claiming fiscal discipline. The GH¢68.8 billion liability understated the true fiscal position and misrepresented Ghana's capacity to meet future obligations. When a new government inherits fictitious liabilities worth GH¢10.4 billion, fiscal planning becomes archaeological investigation rather than forward-looking management.

However, the structural lessons matter more than partisan attribution. Ghana's public financial management framework permits arrears accumulation because commitment authorisation operates separately from budget execution. Contractors submit invoices that may or may not reflect completed work. Certifying officers approve payments without adequate verification capacity.

The current administration's response demonstrates one corrective approach: comprehensive external audit before payment. This establishes precedent. Future administrations inheriting arrears now face expectations of similar validation exercises.

The budget statement notes the introduction of a Commitment Authorisation System under the amended Public Procurement Act. This reform aims to prevent future arrears accumulation through real-time oversight of expenditure commitments.

These mechanisms address symptoms rather than causes. Public institutions lack sufficient capacity or consequences to enforce expenditure discipline. Until Ghana resolves this structural weakness through comprehensive civil service reform and strengthened audit capacity, arrears audits will remain necessary but insufficient responses to institutional failure. The GH¢10.4 billion rejected represents taxpayer funds nearly extracted through systematic fraud. Without understanding how phantom debt accumulates, Ghana cannot prevent its recurrence.