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The World Bank projects a much smaller fiscal deficit of 7.2% of Gross Domestic Product for Ghana this year, lower than the government’s revised forecast of 12.2%, according to its Africa Pulse Report.
The fiscal GDP deficit will be roughly 5% lower than the government’s revised forecast of 12.2%.
The government had previously projected a fiscal balance of -4.4% of GDP, but COVID-19 forced it to revise the target by a wider margin.
However, the recent rebound in economic activities, which is expected to generate some necessary revenue, may have led to this adjustment.
However, the country’s fiscal deficit, that is, the deficit of income compared to spending, is expected to be second only to South Africa in sub-Saharan Africa.
Total revised revenue and grants for this year are estimated at GHS 51 billion, while total spending, including arrears, is projected at GHS 99 billion.
Estimated total revenue is approximately 1.6 billion GHS lower than last year’s estimate.
The World Bank said that the average increase in the fiscal deficit in sub-Saharan Africa this year is considerably lower, relative to that of advanced economies.
Globally, the nation’s budget deficit for this year will be lower than that of the United States of America, but higher than that of Germany and the United Kingdom.
However, neighboring Nigeria, with more than 200 million inhabitants, will run a budget deficit of 1.3 percent of GDP.
The average for Sub-Saharan Africa is forecast at 3.5 percentage points of GDP.
However, the World Bank expressed concern about the fiscal support deployed by the governments of the region.
Monetary Policy Report September 2020
The Monetary Policy Committee report said interim data on budget execution for the first seven months showed an overall budget deficit of 7.4 percent of GDP, up from the revised target of 7.2 percent of GDP, as the COVID-19 pandemic continued to affect fiscal operations.
The primary balance also posted a deficit of 3.7 percent of GDP, above the expected target of 3.4 percent of GDP.
During the review period, total revenue and grants amounted to GHS 27.7 billion compared to the GHS 26.8 billion target. Total expenses and settlement of arrears amounted to 56.2 billion GHS, above the target of ¢ 53.3 billion GH.
