Ghana remains committed to its fiscal consolidation goals under the International Monetary Fund (IMF) Extended Credit Facility programme by focusing on revenue mobilisation.
With a current tax-to-GDP ratio of 15.7% (as of 2022), the government aims to boost this figure to over 18% by the end of the programme.
The IMF highlighted that Ghana’s strategy hinges on introducing new taxes and strengthening tax compliance rather than eliminating existing levies.
The 2023 Medium-Term Revenue Strategy serves as the cornerstone for achieving these targets, emphasizing: reducing tax expenditures to close revenue gaps, enhancing compliance through improved enforcement mechanisms, and balancing fiscal needs and growth.
While revenue collection remains a priority, the government is also tasked with managing expenditures effectively. The IMF advised: streamlining expenditures to eliminate inefficiencies and reduce arrears, reserving growth-enhancing investments in infrastructure and social programmes, and reducing energy subsidies through tariff adjustments and cost-control measures.
The IMF indicated that the ongoing external debt restructuring aligns with the programme’s parameters and supports a sustainable debt trajectory.
However, Ghana’s debt remains sensitive to global commodity prices and export performance, emphasizing the importance of mitigating external shocks.
Stress tests reveal vulnerabilities to public debt stemming from contingent liabilities and external shocks, such as fluctuating commodity prices. Addressing these risks will require policy discipline, diversification of revenue sources, and sustained economic reforms.
With a comprehensive approach to revenue mobilisation and expenditure rationalization, Ghana seeks to balance its fiscal obligations with the need to drive economic growth and social development. The success of these efforts will play a critical role in the country’s medium-term economic resilience.
