Fiscal consolidation efforts in Sub-Saharan Africa including Ghana will gain renewed focus in 2025, Fitch Solutions has revealed in its latest report dubbed “Sub-Saharan Africa Macro Key Themes for 2025: Stronger Headline Growth but Structural Vulnerabilities Exist”.

However, the UK firm said the fiscal progress will be constrained by persistent structural challenges.

“In 2024, fiscal slippage occurred in key economies like South Africa, Nigeria and Ghana, in part driven by election-related expenditure and public resistance to government efforts to enhance revenue collection”. It pointed out.

With major elections concluded and cost-of-living pressures easing, Fitch Solutions pointed out that the governments will make more determined efforts towards fiscal consolidation in 2025.

“While the overall SSA budget deficit will shrink from 4.3% of GDP in 2024 to 3.9% in 2025, it will remain well above the 2010-2019 average of 3.2%”.

Indeed, it stressed that 27 out of 49 SSA countries, including Nigeria, Ethiopia, Ghana, the DRC, Côte d'Ivoire and Uganda, will continue to experience higher fiscal shortfalls in 2025.

This is compared to their respective 2010-2019 averages.

Monetary policy cycle to continue

It continued that lower average inflation will see central banks across the region start or continue their monetary easing cycles, leading to greater monetary policy convergence in SSA.

That said, it noted that idiosyncratic factors in large markets (notably Nigeria and Ethiopia) will see regional inflation remain above the 2014-2023 average of 11.4%.