Ghana’s fiscal deficit to widen to 3.9% a year through 2029 – S&P
Ghana's budget for 2026 aims to raise capital spending by 150%. But S&P said the government spending has been heavily curtailed since the end of 2024, particularly for capital projects.
S&P Global has forecast that Ghana's fiscal deficit will widen to 3.9% annually through 2029. This increase from the previous forecast of 2.7% annually is due to revenue shortfalls in 2026 linked to factors such as the temporary removal of the fuel levy, clearance of legacy arrears, and higher capital spending. The Ghanaian budget for 2026 aims to raise capital spending by 150%, but government spending has been curtailed since late 2024, particularly for capital projects.
The government now requires approval by the Minister of Finance for procurement and prioritizes capital projects. S&P also notes that Ghana's revenue measures could offset more significant budget shortfalls over time. Non-oil tax revenue, especially corporate income tax and mineral royalties, is expected to improve due to a better business environment.
Lower inflation and a more stable exchange rate support investor sentiment. However, S&P warns that the conflict in the Middle East could create inflationary and foreign exchange pressures. The agency also highlights potential revenue boosts from reforms aimed at simplifying VAT, reducing the number of levies, and lowering the effective VAT rate.
The government plans to boost collections through digital devices capturing revenue from the informal sector and AI-driven solutions to improve customs revenue collection.
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