Ghana to grow tax-to-GDP ratio to 18.1% in the next three years – IMF forecasts
The Fund is forecasting an 18.1% tax-to-GDP growth for Ghana by the next three years – 2027.
The projection is some 1,300 basis points (1.3%) increment over 2024’s 16.8% tax-to-GDP growth rate target set by the Government.
Total revenue and grants for 2024 are projected at GHS 176.4 billion (16.8% of GDP) and are expected to be underpinned by permanent revenue measures largely tax revenue measures amounting to 0.9% of GDP.
Total government expenditure projected for the 2024 fiscal year amounts to some GHS 226bn.
The projected expenditure represents approximately 21.6% of the country’s current Gross Domestic Product (GDP).
The expenditure projection according to Finance Minister Ken Ofori-Atta, reflects a reduction of 6.1% of GDP in total expenditures (commitment basis) relative to the outturn in 2022.
The projection contained in the IMF’s 2023 Article IV Consultation on Ghana’s economy, indicates that the country’s tax-to-GDP ratio will marginally surpass the 18% African average tax-to-GDP ratio target.
Meanwhile, the International Monetary Fund (IMF), is forecasting a GHS 1.54 trillion economy size for Ghana by the close of 2027.
Ghana, per the IMF projection, is expected to grow from a GHS 1 trillion economy size in 2024 to a GHS 1.21 trillion economy size in 2025; GHS 1.37 trillion size in 2026 and GHS 1.54 trillion size in 2027.
The projection by the Fund follows the approval of the $600m second tranche by the IMF under the 3-year ECF programme.
The expansion of the economy to GHS 1.54 trillion by 2027, the IMF notes, will come along with an increased tax-to-GDP ratio, increased foreign reserves, and reduced debt-to-GDP ratio.
