Finance Minister, Ken Ofori-Atta

Ghana’s fiscal deficit is estimated to be a whopping -16.4% of GDP in 2020 and -9.3% of GDP in 2021.

In contrast, the pre-pandemic 2020 budget originally had a -4.7% deficit estimate.

This was subsequently revised to -11.2% of GDP during the mid-year budget presented by Finance Minister Ken Ofori-Atta on 23 July to account for Covid-19 impact on higher spending and anticipated lower revenues.

Government debt, on the other hand, is expected to increase from 62.8% of GDP in 2019 to 76.7% in 2020 and 74.7% in 2021, raising significant debt sustainability concerns especially for external debt servicing with various Eurobond coupon payments due in the coming months.

External reserves are forecasted to drop from 3.6 months of import cover in 2019 to 2.7 months of import cover between 2020-2021.

The economy is forecasted to grow at 0.9% in real GDP terms in 2020, picking up to 4.2% real GDP in 2021.

This is also dependent on the pace of overall global economic recovery

Data source: IMF Regional Economic Outlook for Sub-Saharan Africa, October 2020


The writer Dr Theo Acheampong, Economist and Political Risk Analyst