Ghana’s fiscal deficit to hit 9.2% of Gross Domestic Product
The IMF is forecasting a fiscal deficit of 9.2% of Gross Domestic Product for Ghana in 2022.
This is coming despite a significant cut in expenditure and expected improvement in revenue.
The deficit is slightly lower than the 11.4% it projected for 2021.
It is however higher than government’s revised 6.6%, captured in the Mid-Year Budget Review.
Based on the figures, the country’s fiscal deficit to GDP is higher than all its peers in Sub-Sahara Africa. Zambia follows closely with a fiscal deficit of 9.1% of GDP in 2022.
The Fund said in its October 2022 Fiscal Monitor Report the deficit will however be slightly lower in 2023, 2024 and 2025 at 8.6%, 8.9% and 8.7% respectively.
It will however assume an upward trajectory in 2026 and 2027 at 9.7% and 9.6% respectively.
Meanwhile, the primary deficit is estimated at 2.1% of GDP in 2022.
It will however narrow to 1.1% of GDP in 2023 and further to 0.0% in 2024.
This will indicate that the country’s revenue mobilisation may be improving.
Also, government tax revenue in relation to the country’s Gross Domestic Product will grow consecutively from 14.1% in 2022 to 14.7% in 2023, and subsequently to 15.4% in 2025% and then 16.1% in 2026.
However, it is lower than most of its peers in the Sub Saharan Africa region.
Government expenditure in relation to GDP is also estimated at 23.3% of GDP in 2022, a drop from 25.7% recorded in 2021.
It will however remain unchanged in 2023 but will shoot up consecutively in 2024, 2025 and 2026 to 24.3%, 24.8% and 25.8% respectively.
Comparatively to its peers on the African continent, Ghana’s expenditure is one of the highest.
