Provisional data on budget execution from January to July 2024 indicates that Ghana recorded an overall fiscal deficit of 2.4 percent of GDP, surpassing the budget target of 2.8 percent of GDP.
The deficit, amounting to GH¢24.8 billion, was financed through both domestic and foreign sources, with GH¢24.2 billion sourced domestically and GH¢17.4 billion from international financing.
The primary balance for the period reflects a deficit of GH¢3.8 billion, equivalent to 0.4 percent of GDP, slightly above the primary deficit target of GH¢3.5 billion (0.3 percent of GDP).
According to the 2024 National Budget Statement, the aggregate fiscal deficit, including grants, increased to 6.1 percent of GDP in 2022, up from 6.5 percent in 2021. Excluding grants, the deficit rose to 5.8 percent of GDP in 2022 from 5.0 percent in the previous year. This deterioration in the fiscal position occurred amidst rising debt servicing costs due to hikes in domestic and external interest rates, as well as increased transfers and relief supports aimed at cushioning the population against the surging cost of living.
The overall commitment basis fiscal deficit is projected to moderate from an estimated 4.6 percent of GDP in 2023 to 4.9 percent of GDP in 2024, with a further reduction expected to 2.4 percent of GDP by 2027. Similarly, the overall cash basis fiscal deficit is expected to improve from an estimated 5.3 percent of GDP in 2023 to 6.0 percent of GDP in 2024, and subsequently to 3.3 percent of GDP by 2027.
In terms of external payments, Ghana’s position remained strong in the first eight months of the year. The trade balance recorded a provisional surplus of US$2.78 billion, a significant increase from the surplus of US$1.66 billion recorded during the same period in 2023. This surplus was primarily driven by increases in gold and crude oil exports, which surged by 22.3 percent to US$12.92 billion in total exports. Notably, gold exports rose by 62.2 percent to US$7.27 billion, while crude oil exports increased by 16.7 percent to US$2.77 billion.
In contrast, cocoa exports, including both beans and products, fell by 42.7 percent to US$917.8 million as of August 2024, largely due to challenges posed by extreme weather conditions. The total imports bill also increased by 14.0 percent to US$10.14 billion during the same period. Oil imports accounted for US$3.0 billion, an increase of 3.6 percent, while non-oil imports rose by 19.0 percent to US$7.1 billion.
The buildup of international reserves continued into August 2024, with gross international reserves increasing by US$1.58 billion to reach US$7.50 billion at the end of the month, providing 3.4 months of import cover. Net international reserves also saw a boost, increasing by US$1.73 billion to US$4.92 billion at the end of August 2024. This higher accumulation in gross international reserves was primarily attributed to the strong performance of the domestic gold purchase program.
Ghana’s fiscal and external performance indicates a mixed yet improving outlook as the nation navigates economic challenges while striving for sustainability and growth.