International professional services firm, Deloitte Ghana, is advising that the government must take swift steps to protect its fiscal gains by slashing expenditure proportionally to revenue shortfalls or finding new and reliable revenue streams.
These proposals from the firm come after it became evident that the much-touted appreciation of the cedi is a two-edged sword. This means that while it is saving the pockets of Ghanaians, the revenues of the government hinge on the foreign currency, are taking a major hit.
In its 2025 Mid-Year Budget Review, Deloitte confirmed that while revenue from Non-Oil Tax sources, Corporate Income Tax, and Mineral Royalties remain strong, there was significant underperformance in Grants, Petroleum Receipts, and Import Duties, which are largely due to the strengthening of the Ghana cedi.
This development, Deloitte says, poses a significant risk to the targets in the budget.
“Despite the strong performance in Non-Oil Tax Revenue, Corporate Income Tax, and Mineral Royalties revenue handles, the underperformance in Grants, Petroleum Receipts, and Import Duties presents risks to achieving the 2025 revenue budgets,” portions of Deloitte’s review noted.
It further explained that, “We note that the downward trend in exchange rates, whilst being favourable in some respect, has weakened revenue performance across specific components like the petroleum receipts and import duties since material portions of these are indexed in USD.”
To address this situation, Deloitte recommends a massive expenditure cut which is proportional to the revenue loss. This proposal is expected to mitigate the net effect of the revenue shortfall, which will safeguard the anticipated budget deficit.
Aside from the expenditure cut, Deloitte believes that the government can take the path of introducing new revenue streams which are sustainable.
“The Government should either match revenue losses with a commensurate reduction in expenditure or introduce other revenue-enhancing measures to counter the impact of such losses to ensure we consolidate the fiscal gains recorded in H1 2025,” Deloitte proposed.
Already, many tax analysts have indicated the country has huge potential in the area of property taxes. With the urgent need to shore up revenue, property taxes are one area the government can aggressively explore.
These recommendations are not only timely but vital. Without a pragmatic policy response, Deloitte warns that the hard-won fiscal consolidation recorded in the first half of 2025 could be reversed in the remaining months of the year.
As the government navigates this tricky path between currency strength and revenue enhancement, Deloitte Ghana believes that the challenge for policymakers will be to strike the right balance between sustaining macroeconomic stability and ensuring budget execution stays on course.
