Fiscal consolidation in Ghana, others to gain renewed focus next year – Fitch Solutions

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’ the UK firm, however, stated that the fiscal progress would 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,” the report indicated.

With major elections con­cluded and cost-of-living pres­sures easing, Fitch Solutions said governments would make more determined efforts towards fiscal consolidation in 2025.

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

The report stated that 27 out of 49 SSA countries, including Nigeria, Ethiopia, Ghana, the DRC, Côte d’Ivoire and Uganda, would continue to experience higher fiscal shortfalls in 2025.

The report noted that lower average inflation would see central banks across the region start or continue their monetary easing cycles, leading to greater monetary policy convergence in SSA.