Ghana’s primary balance to Gross Domestic Product (GDP) will achieve a surplus from 2025 onwards, the International Monetary Fund April 2022 Fiscal Monitor has forecast.

According to the Fund, the country will record a primary surplus - the difference between government revenue and non-interest expenditure - of 0.1% of GDP in 2025, 2026 and 2027 respectively.

This will come as good news because the government fiscal deficit to GDP may return to the targeted regime of 5% at the time of a positive primary balance.

The Fund also predicted a 1.5% primary deficit of GDP in 2022, from 4.1% recorded in 2021. In 2023 and 2024, the primary balance to GDP will be -0.6% and -0.3%.

The country’s primary balance to GDP however stood at -1.5% in 2016, 1.2% in 2017, -1.4% in 2018, -1.7% in 2019 and -9.2% in 2020.

The government of Ghana is targeting a positive primary balance in 2022 in line with the Fiscal Responsibility Act threshold target by 2022. In actual fact, government is targeting a primary surplus of 0.1% of GDP.

In 2021, Ghana recorded a primary deficit of ¢8.464 billion (1.9% of GDP).

The 2022 Budget reinforce government’s commitment to the fiscal and debt sustainability agenda which commenced in 2021 through continued structural fiscal reforms, legislation of new revenue policy initiatives, particularly on the back of government’s massive digitalisation drive, and expenditure rationalisation and reforms, among others.