Ghana’s fiscal consolidation efforts are gaining traction, as the government managed to stay aligned with its 2025 budget targets despite lower-than-projected revenues in the first quarter.
According to Dr. Johnson Pandit Asiama, Governor of the Bank of Ghana (BoG), provisional data on budget execution indicates that effective expenditure rationalisation helped offset the revenue shortfall, allowing the primary fiscal balance to improve on a commitment basis.
“The fiscal policy implementation has broadly aligned with the 2025 Budget. Although revenues fell below target in the first quarter, rationalisation measures were taken to keep the fiscal programme on track,” Dr. Asiama told journalists at the Monetary Policy Committee (MPC) briefing in Accra.
As of March 2025, Ghana’s public debt stood at GH¢769.4 billion, representing 55.0% of GDP, down from GH¢726.7 billion (61.8% of GDP) at the end of December 2024. The decline in the debt-to-GDP ratio reflects prudent fiscal management and a rebound in nominal GDP, along with more stable macroeconomic conditions.
External Sector Bolsters Confidence
Complementing the domestic fiscal gains, Ghana’s external sector delivered one of its strongest performances in recent years. A provisional current account surplus of US$2.1 billion was recorded in the first quarter, buoyed by high global prices and increased export volumes of gold and cocoa, along with strong remittance inflows.
This current account surplus, despite net capital and financial account outflows, contributed to an overall Balance of Payments surplus of US$1.1 billion.
“These developments have significantly strengthened our external buffers,” Dr. Asiama noted.
Ghana’s Gross International Reserves (GIR) reached US$10.7 billion by end-April 2025, up from US$9.98 billion in December 2024, providing 4.7 months of import cover. This is the highest reserve level recorded in recent years and reflects disciplined reserve management and improved foreign exchange inflows.
Addressing the significance of the reserves, Dr. Asiama explained, “It’s desirable that we maintain a minimum of three months of import cover at all times. Currently, we are way above that. It’s more than adequate. It ensures our external resilience. Even if in the future we have any shocks confronting the country, we will have the necessary tools to protect the economy.”
He clarified that there is no upper cap on reserves, but a floor that should not be breached. “What we have now is at levels we are comfortable with,” he added.
Outlook Remains Positive
The Governor stated that the regulator remains optimistic about the outlook for the remainder of the year, citing favourable trends in gold and cocoa exports and sustained remittance flows. These external inflows are expected to support the cedi’s stability and help maintain inflationary control, reinforcing the broader macroeconomic recovery agenda.
Dr. Asiama stressed that continued fiscal consolidation will be key in sustaining the gains made so far. “Maintaining this trajectory through the 2025 fiscal year will further strengthen Ghana’s recovery process and enhance macroeconomic stability,” he added.
