Ghana’s fiscal economy to improve significantly; Fiscal deficit to GDP estimated at 5.0% in 2024 – IMF

Ghana’s fiscal economy is expected to improve significantly in the next four years as the International Monetary Fund (IMF) is projecting a lower fiscal deficit to Gross Domestic Product (GDP) ratio in 2024, 2025, 2026 and 2027 respectively.

This would be aided by the Fund-supported programme which has culminated in ambitious structural fiscal reforms by the country bolstering domestic revenues, improving spending efficiency, strengthening public financial and debt management, preserving financial sector stability as well as enhancing governance and transparency.

According to the First Review under the $3.0 billion Extended Credit Facility Arrangement, the IMF projected an overall fiscal deficit to GDP of 5.0% in 2024 and 4.3% in 2025 respectively.

It will further decline to 3.6% and 3.1% of GDP in 2026 and 2027 respectively.

In 2023, the fiscal deficit-to-GDP ratio was estimated at 4.6% as against 11.8% in 2022. Before then in 2020 and 2021, the fiscal deficit to GDP was estimated at 17.4% and 12.0% respectively.

These figures indicate that the government adopted a tight budget spending in 2023 as captured by the IMF Programme which stresses more on revenue mobilisation. In election year, the figure is expected to go up slightly.

Primary balance estimated at 0.1%

Similarly, the primary balance will narrow to a surplus of 0.5% of GDP in 2024, from a deficit of 0.5% in 2022.

In 2025, 2026 and 2027, however, the primary balance will record a surplus of 1.5% each respectively.

This is a result of an anticipated strong revenue growth, reduced expenditure and a decrease in interest payment.