Cassiel Ato Forson Photo by Ernest Ankomah /Photographer: Ernest Ankomah/Get (Bloomberg) Ghana lowered its 2025 budget-deficit target after raising its revenue forecast and trimming projected spending, underscoring the governments commitment to fiscal discipline.
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Finance Minister Cassiel Ato Forson cut the fiscal gap estimate to 2.8% of gross domestic product, from 3.1%, in a mid-year budget review presented to parliament on Thursday. The primary balance target which excludes interest payments on debt was retained at a surplus of 1.5% of GDP and economic growth of at least 4% is still envisioned, he said.
Forson lowered the expenditure target for the year to 269.5 billion cedis ($25.8 billion) from 270.9 billion cedis, in part due to a reduction in Treasury bill interest rates. The projection for revenue and grants was increased to 229.9 billion cedis from 227.1 billion cedis previously due to an amendment in the Energy Sector Levies Act that will likely boost revenue from fuel sales.
That means the governments projected annual borrowing needs will decline by 4.3 billion cedis, Forson said.
The targets are in line with an International Monetary Fund requirement of 3.7% of GDP for the overall fiscal shortfall and a 1.5% surplus for the primary balance.
Ghana agreed to a $3 billion IMF program two years ago after ballooning debt forced the government to default in 2022. The program, together with President John Mahamas commitment to fiscal consolidation, has spurred a 41% gain in the cedi against the dollar this year the best performer among currencys tracked by Bloomberg worldwide after the Russian ruble.
Africas top gold producer intends to restrart the domestic bond market to finance the budget deficit, Forson said.
Beginning August, we will commence the selection of new bookrunners to assist government in the reopening of the domestic market, he said. The selection will focus on banks and investment dealers with the ability to achieve a wider market distribution and advise on pricing and structuring, he added.
- Ghana expects to sign bilateral debt-restructuring agreements with France and another country on Friday, and another two deals by the end of the month.
- The government has made adequate preparations toward full settlement of all debt service in 2025 and beyond.
- Cedi and dollar sinking fund accounts have been set up. Beginning August, the government will start building cash buffers to support the repayment of Ghanas domestic debt-service obligations.
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With assistance from Moses Mozart Dzawu.
(Updates with more details below tout)
