Ratings agency, Fitch, has stated that the 1.75% Electronic Transaction Levy (e-levy) will boost Ghana’s revenue and drive an increased in government revenue to 20% of Gross Domestic Product (GDP) in 2022.

This is compared to an estimated 15.4% of GDP in 2021.

“The government’s fiscal consolidation plans are focused on revenue measures adopted in the 2022 budget, including a new 1.75% e-levy on certain digital transactions and changes to the calculation of certain taxes and import duties. The medium-term fiscal framework envisages that these new revenue measures, together with fading pandemic-related expenditure, will drive an increase in government revenue to 20.0% of GDP in 2022 from an estimated 15.4% in 2021”.

The ratings agency issued a statement today 21^st January, 2022, correcting commentary published on 14^th January, 2022. It corrected the rating action on Ghana’s senior unsecured debt, which Fitch has downgraded, not affirmed.

“Fitch Ratings has downgraded Ghana’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘B-‘ from ‘B’. The Outlook is Negative”, it pointed out.

Fitch believes that Ghana will achieve moderate medium-term fiscal consolidation, but that the government’s forecasts are overly optimistic.

“We forecast the fiscal deficit will narrow by significantly less, to 9.5% of GDP in 2022 and approximately 8.0% in 2023, as government revenue experiences a smaller increase”.

It further stated that “Ghana has struggled with earlier efforts to raise revenue/GDP and public finances were deteriorating even before the pandemic, albeit partly related to the clean-up in the financial and energy sector.”