Fiscal balances improving in Ghana, others; Ghana’s fiscal deficit to GDP to end 2024 at 4.2% – World Bank

The World Bank says fiscal balances in Ghana and other Sub-Saharan African countries continue to improve, thanks to expenditure-cutting and revenue-raising policies, although the pace is decelerating.

In its October 2024 Africa Pulse Report, it said that most Sub-Saharan African governments are engaged in fiscal consolidation to achieve public sector sustainability amidst restricted fiscal space and limited access to external borrowing.

The World Bank forecast a fiscal deficit of 4.2% of Gross Domestic Product (GDP) for Ghana in 2024.

This is compared with 3.5% in 2023 and 11.0% in 2022 respectively.

It explained that some successful efforts include improving administrative oversight of spending programmes, eliminating “ghost workers” from payrolls, implementing tax administration and compliance measures and tax rate reforms, streamlining government incentives and value-added tax exemptions, reforming subsidies, and reprioritising public spending toward programmes with high growth and job multipliers.

It continued that the African region’s median fiscal deficit is projected to decline from 3.9% of GDP in 2023 to 3.3% in 2024.

 It is set to drop further to 2.9% of GDP in 2025–26.

Fiscal balances for the majority of Sub-Saharan African countries (29 of 47) are expected to improve this year.

Ten of the countries with improved fiscal accounts in 2024 will have a narrower deficit (less than 3.0% of GDP) or shift into a surplus.

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