Fitch Solutions has disclosed that Ghana’s 2023 budget is more expansionary than it had anticipated, keeping public spending elevated.
In its latest February 2023 Africa Monitor Report, it said despite the government aiming to implement some expenditure reforms, the Finance Minister, Ken Ofori-Atta, did not announce large-scale spending cuts.
“While the government aims to implement some expenditure reforms – including a hiring freeze for public servants and placing a cap on salary adjustments at state-owned enterprises – the Finance Minister did not announce large-scale spending cuts”.
“Indeed, the government aims to keep capital expenditure and grants to government units elevated – areas that we had expected the authorities would cut back on. As such, the government aims to spend a total of ¢205.4 billion, a 51.5% increase on the 2022 target, making the 2023 budget one of the most expansionary budgets in Ghana to date”, it stated.
Budget deficit to remain high in 2023
Fitch Solutions also projected a budget deficit of 7.5% of Gross Domestic Product (GDP) in 2023.
This is higher than its earlier forecast of 6.7%.
It said stronger tax collection will improve outlook in 2023, but spending will remain high.
On November 23 2022 Finance Minister, Ken Ofori-Atta, presented the 2023 budget, highlighting multiple tax reforms that will boost revenue collection.
However, Fitch Solutions said “the 2023 budget detailed spending targets that were more expansionary than we had anticipated, suggesting the budget deficit will remain wider for longer”.
The government aims to raise ¢144.0bn in 2023, a 43.2% increase on the 2022 target.]
It noted that the 2023 revenue target is unrealistic, adding, while higher taxes will boost fiscal intakes, weakening economic activity on the back of still-elevated inflation and tighter monetary policy will cap revenue growth.
Latest Stories
-
Azumah Nelson Sports Complex: Gov’t advised to terminate project contract
4 mins -
Dumsor will be a thing of the past soon – Bawumia assures
11 mins -
Why do you always run to the media? – EC quizzes IMANI
18 mins -
Francis Doku charges government to market traditional festivals
26 mins -
Ghana records an average of 9,900 snakebites annually
32 mins -
Fella Makafui sets record straight on relationship with D-Black
33 mins -
CEGENSA celebrates mentors for nurturing UG’s upcoming female leaders in academia
36 mins -
Dr. Bawumia begins Eastern regional tour with religious leaders in Akropong
41 mins -
Akosombo Dam Spillage: Would victims have been ignored if they were in swing constituencies – Ablakwa fumes
46 mins -
Have capacity to influence policy – former MiDA boss to engineers
57 mins -
Silva to leave Chelsea at end of season
1 hour -
Ghana’s Online Freedom of Expression in peril, citizens’ rights eroded – Londa Report
1 hour -
CAF Confed Cup: Karim Zito blames semi-final exit on lack of experience
1 hour -
CAFCC: Dreams FC didn’t lose because of stage fright – Karim Zito
1 hour -
ECG threatens to disconnect Ashanti Regional Minister’s residence if found to be in debt
1 hour