Set realistic budgetary targets to ensure fiscal credibility – IFS tells govt

The Institute for Fiscal Studies (IFS) has urged the government to set realistic budget targets to enhance fiscal credibility. It criticized Ghana’s persistent over-projection of revenues, noting that from 2013 to 2023, actual revenue consistently fell short, with an average deviation of -7.4%.

IFS also warned against excessive borrowing, particularly from the international bond market, highlighting Ghana’s past debt crises in 2001 and 2022. It advised the government to maintain lower fiscal deficits, leverage natural resources for self-reliance, and avoid foreign debt entanglements.

The think tank emphasized that Ghana’s recent ability to function without international borrowing should be a lesson in fiscal discipline. Ensuring responsible revenue forecasting and sustainable financial management is crucial for long-term economic stability.