Fitch Ratings has reported a low risk of fiscal policy slippage ahead of Ghana’s December 2024 elections, given the government’s strong commitment to the International Monetary Fund (IMF) programme
However, the UK-based firm noted increased uncertainty regarding the level of commitment from a potential new administration.
“We estimate the 2024 primary surplus, on a commitment basis, will reach 0.3% of Gross Domestic Product, representing a 4.6 percentage points adjustment compared with 2022, driven by a 0.6 percentage points increase in revenue and a 4.1 percentage points reduction in primary expenditure”.
“Despite a record of fiscal slippage in election years, we consider there is a low risk of policy slippage in the lead up to the elections due in December 2024, given the strong commitment of authorities to the IMF programme, but there is currently greater uncertainty over the degree of commitment of a new administration,” it added.
It projected Ghana’s primary surplus to reach 0.9% of Gross Domestic Product in 2026 on a commitment basis.
Fitch Ratings added that Ghana achieved a current account surplus of 1.8% of GDP in 2023, up from a 2.3% deficit in 2022.
This improvement was driven by the suspension of external debt payments and a reduction in merchandise imports, which more than compensated for weaker export performance.
“We anticipate the current account balance to return to a deficit of 0.7% of GDP in 2024, on difficulties in the cacao sector and external debt service resumption, followed by 1.5% and 1.7% in 2025 and 2026, respectively”.