Ghana Predicted to Reduce Fiscal Deficit to 4.5% of GDP in 2024; GH¢55.93bn Allocated for Interest Payments  

Databank Research has revealed that Ghana is expected to narrow its fiscal deficit as a percentage of Gross Domestic Product (GDP) to approximately 4.5% ± 50 basis points in 2024. This improvement is attributed to the potential savings in interest payments resulting from the restructuring of external debt, although concerns remain about fiscal overruns during election periods

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As of September 2023, the Bank of Ghana reported that the country’s fiscal deficit stood at 2.5% of GDP.

In its Quarterly Report for 2024, the research firm stated that the fiscal balance could benefit from possible interest savings resulting from the ongoing restructuring of external debt. Despite the ongoing negotiations with various creditor groups to suspend debt servicing, the government had budgeted GH¢19.04 billion for external interest payments.

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“We anticipate that the government could achieve interest savings once the restructuring deals are concluded, leading to an improvement in the fiscal balance,” the report highlighted.

For the year 2024, the government has allocated GH¢55.93 billion for interest payments, while GH¢63.8 billion will be allocated for employee compensation. Overall, the government plans to spend GH¢226.68 billion in 2024.

In terms of revenue and grants, the government aims to mobilize GH¢176.41 billion, with GH¢173 billion expected to come from domestic revenue.

SOURCE:http://coverghana.com.gh