Ghana’s fiscal position to improve to 4-5% of GDP in 2025 – Databank Research

Ghana's fiscal position is set to improve. By the first half of 2025, the deficit is expected to be 4–6% of GDP. This information comes from Databank Research.

The improvement will result from delays in clearing arrears and increased IMF financing. An anticipated US$370 million disbursement will also help.

Databank believes revenue mobilization will start strong. They expect targeted cuts in capital expenditure (CAPEX) to aid this. The primary balance should improve from a 3.9% deficit recorded in 2024.

Ghana plans to allocate GH¢13 billion for arrears clearance. This is against a backlog of GH¢67 billion. They see enough fiscal space to reduce the overall deficit from 7.9% of GDP.

Effective implementation of the Commitment Control and Compliance League Table is crucial. This will help enforce fiscal discipline among Metropolitan, Municipal, and District Assemblies (MMDAs).

Ghana’s short-term external outlook remains positive. Databank expects sustained current account surpluses to support this view. The full operationalisation of GOLDBOD will further strengthen this position.

With improved reserve buffers and the GH¢370 million ECF disbursement, gross international reserves may exceed GH¢10 billion by mid-year. Strong inflows from gold, cash crops, and remittances are driving this growth.

External activity remains resilient due to expanding trade agreements with the UAE, China, and Switzerland. Limited US trade exposure helps mitigate tariff risks.

Overall, Databank maintains a positive outlook for Q2 2025. Growing intercontinental trade and improving capital account flows reinforce this optimism.