Ghana’s Fiscal Deficit to Widen to 4.2% of GDP in 2024, Says World Bank
Ghana’s fiscal deficit is forecast to reach 4.2% of GDP in 2024, up from 3.5% in 2023, but markedly below the 11% recorded in 2022, according to the World Bank’s October 2024 Africa Pulse Report.
The report highlights a broader trend of fiscal consolidation across Sub-Saharan Africa as governments implement measures to improve public sector sustainability in the face of tight fiscal space and limited external borrowing options.
While the pace of fiscal improvements is slowing, the World Bank credits the progress to a range of expenditure-cutting and revenue-raising initiatives that include tightening oversight of public spending, tackling ghost workers on payrolls, enhancing tax compliance, reforming subsidies, and reprioritising public spending towards high-growth and job-creating programmes.
Across the region, the median fiscal deficit is projected to narrow from 3.9% of GDP in 2023 to 3.3% in 2024, with further declines anticipated through 2025-2026.
Notably, fiscal balances in 29 of 47 Sub-Saharan African countries are expected to improve this year, with ten countries forecast to see deficits shrink to below 3.0% of GDP or transition to a fiscal surplus by the end of 2024.
Despite these positive trends, the report notes that the fiscal consolidation process remains fragile, underscoring the need for continued reforms to ensure long-term fiscal sustainability.
