Ghana’s fiscal deficit is expected to remain elevated in 2023.
According to the October 2023 World Bank Africa Pulse Report, the deficit in Ghana will remain elevated in 2023–2025, although it is expected to decline from 11% of Gross Domestic Product in 2022 to 7.5% of GDP in 2023.
It stated that government revenues will improve at a slower pace as growth in economic activity remains subdued.
This is despite a series of revenue measures implemented by the government, such as the 2.5 percentage point increase in the value-added tax and an increase in excise duties.
It furthered that an acceleration of growth will reduce the fiscal deficit further to 6.7% of GDP in 2025.
The Bank of Ghana stated in Monetary Policy Report that there were challenges associated with revenue mobilization and this will require additional efforts to safeguard the revenue-led fiscal adjustment programme while policies remain consistent with the IMF-supported programme.
The World Bank continued that fiscal consolidation in Sub-Saharan Africa continues as countries in the region are making efforts to rebuild fiscal space to engineer a more sustained and inclusive recovery from the poly-crisis.
Amid a significant drop in official development assistance in recent years, and restricted access to external borrowing (particularly for those countries with debt distress), some governments in the region are taking steps toward increasing revenues—through improved tax administration and tax reforms—and streamlining fiscal incentives.
The fiscal deficit in Sub-Saharan Africa is projected to have narrowed from 5.1% in 2022 to 4.3% in 2023.