In 2024, every 32 pesewas of ¢1 of domestic revenue will be used to service the country’s debt, the Institute of Statistical, Social and Economic Research (ISSER) has revealed.

This represents 32% of domestic revenue.  

However, it will be lower than ¢0.56 of ¢1 of domestic revenue spent on debt servicing in 2022.

According to ISSER, the government must minimise borrowing going forward to reduce the budget deficit.

This is because a high deficit will lead to high borrowing, whilst a high debt servicing will restrict fiscal space for capital expenditure.

In its analysis of the impact of the 2024 Budget on the private sector, it said there haven’t been many changes between 2023 and 2024 revenue targets, and as such there is a slightly higher indication for fiscal consolidation in spending.

It also expressed worry about the crowding out of the private sector, thus calling for a zero financing of the budget by the Bank of Ghana in 2024.

Overall fiscal balance (commitment) is projected at 4.8% of Gross Domestic Product in 2024 compared to 5.9% for 2023.

Primary balance (commitment) is projected at a surplus of 0.5% of GDP in 2024 compared to 0.7% for 2023.

ISSER said achieving 2024 targeted fiscal balance will provide a good signal on the potential to break the infamous Political Business Cycle.

Expenditure measures

On expenditure measures, it called for alignment of quarterly budget allotment with cash flow forecast and tightening the use of allotments as controls on the Ghana Integrated Financial Management System (GIFMIS) and the standardization of public works contracts.

Again, it proposed a strict application of Sections 96 to 98 of the Public Financial Management Act by all Principal Spending Officers and the establishment of a compliance desk to track tender advertisements from Covered Entities.

This it believes can be complemented by regular procurement audits.