Adnan Adams Mohammed
The Government of Ghana’s 2023 budget, which expects to expend GH¢205.4 billion, has been described as ‘the most expansionary’ budgets in Ghana’s history, by Fitch Solutions.
In its latest February 2023 Africa Monitor Report, Fitch indicated that, the government would be spending a lot amidst looking at executing austerity measures.
The government, in this year’s budget aims to implement some expenditure reforms, including employment freeze for public servants and placing a cap on salary adjustments at state-owned enterprises, yet, the budgeted expenditure of government is too huge.
“The Finance Minister did not announce large-scale spending cuts”, Fitch Solutions has observed in its newest report.
“Indeed, the government aims to keep capital expenditure and grants to government units elevated – areas that we had expected the authorities would cut back on”, the report said.
“As such”, it noted, “the government aims to spend a total of ¢205.4 billion, a 51.5% increase on the 2022 target, making the 2023 budget one of the most expansionary budgets in Ghana to date”.
Also, Fitch Solutions projects a budget deficit of 7.5% of Gross Domestic Product (GDP) in 2023 — higher than its earlier forecast of 6.7%.
Fitch noted that stronger tax collection will improve outlook in 2023 but spending will remain high.
Fitch Solutions emphasised that the 2023 budget details spending targets that were “more expansionary than we had anticipated, suggesting the budget deficit will remain wider for longer”.
