"Fitch Solutions Predicts Renewed Focus on Fiscal Consolidation in Sub-Saharan Africa for 2025"

" Fitch Solutions Predicts Renewed Focus on Fiscal Consolidation in Sub-Saharan Africa for 2025 \r\n\r\nFitch Solutions has stated that fiscal consolidation efforts in Sub-Saharan Africa (SSA), including Ghana, will receive renewed focus in 2025, according to its latest report titled \u201cSub-Saharan Africa Macro Key Themes for 2025: Stronger Headline Growth but Structural Vulnerabilities Exist.\u201d \r\n\r\nDespite the push for fiscal consolidation, the report highlights that the region will continue to face persistent structural challenges.\r\n\r\nIn 2024, fiscal slippage was observed in key economies such as South Africa, Nigeria, and Ghana, partly driven by election-related expenditures and public resistance to government revenue-enhancing measures.\r\n\r\nFitch Solutions anticipates that with major elections behind and cost-of-living pressures easing, SSA governments will intensify efforts toward fiscal consolidation in 2025.\r\n\r\nThe report predicts that the overall SSA budget deficit will decrease from 4.3% of GDP in 2024 to 3.9% in 2025, though this remains significantly higher than the 3.2% average recorded between 2010 and 2019.\r\n\r\nHowever, 27 out of 49 SSA countries, including Nigeria, Ethiopia, Ghana, the Democratic Republic of the Congo (DRC), C\u00f4te d'Ivoire, and Uganda, are expected to continue experiencing higher fiscal shortfalls in 2025, compared to their respective 2010-2019 averages.\r\n\r\nIn terms of monetary policy, the report suggests that central banks across SSA will begin or continue easing their policies, driven by lower average inflation.\r\n\r\nThis is expected to lead to greater convergence in monetary policy across the region. However, idiosyncratic factors in large markets like Nigeria and Ethiopia will keep regional inflation above the 11.4% average observed between 2014-2023.\r\n\r\nFitch Solutions' analysis suggests that while SSA's fiscal outlook for 2025 is positive, significant structural issues remain that will challenge the region's fiscal and monetary stability."

"Fitch Solutions Predicts Renewed Focus on Fiscal Consolidation in Sub-Saharan Africa for 2025"

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