Ghana’s fiscal trajectory appears to be poised for significant improvement, with Databank Research projecting a reduced budget deficit ranging between 4% and 6% of Gross Domestic Product (GDP) by the first half of 2025. The optimism stems from enhanced International Monetary Fund (IMF) support and institutional reforms aimed at streamlining public expenditure.
The investment and research firm notes that progress in revenue mobilization and prudent capital expenditure (CAPEX) reductions are key to reversing the fiscal deficit, which stood at 7.9% of GDP in 2024.
“With a strong start in revenue mobilization and targeted CAPEX [capital expenditure] cuts, we believe the primary balance will improve from the 3.9% deficit recorded in 2024. By allocating GH¢13bn towards arrears clearance against a GH¢67bn backlog, we see sufficient fiscal space to narrow the overall deficit from 7.9% of GDP,” the report stated.
Databank highlights that the expected disbursement of US$370 million from the IMF under the Extended Credit Facility (ECF) will further bolster fiscal performance. At the same time, delays in clearing arrears are contributing to a slower expenditure pace, giving the government temporary fiscal breathing room.
Institutional reforms are also central to this outlook. The think tank underscores the importance of public finance accountability mechanisms.
“We also believe that effective implementation of the Commitment Control and Compliance League Table for Metropolitan, Municipal and District Assemblies (MMDAs) will play a key role in enforcing fiscal discipline and supporting tighter deficit targets,” it added.
Favourable External Outlook Bolsters Confidence
Beyond the fiscal front, Ghana’s external sector remains robust, with Databank forecasting continued current account surpluses and improved reserve buffers. The rollout of GOLDBOD, a key gold-backed initiative, is expected to underpin these gains.
“With improved reserve buffers and the anticipated GH¢370 million ECF disbursement, we project gross international reserves to exceed GH¢10 billion by mid-year, driven by strong gold, cash crops, and remittance inflows,” the report noted.
The external environment is further strengthened by Ghana’s diversified trade portfolio. Strategic trade pacts with the United Arab Emirates, China, and Switzerland are enhancing export resilience, while the country’s limited reliance on US trade shields it from escalating tariff risks.
“External activity remains resilient, underpinned by expanding trade agreements with the UAE, China, and Switzerland, while limited US trade exposure mitigates tariff risks,” the report explained.
Summarising its macroeconomic stance, Databank maintains a cautiously optimistic view for the near term.
“Overall, we maintain a positive Q2 ’25 [Quarter 2] outlook, reinforced by growing intercontinental trade and improving capital account flows.”
As Ghana positions itself for economic recovery and fiscal consolidation, analysts will be watching closely to see how well policy commitments translate into measurable gains.
