The government has updated its 2024 macroeconomic framework in response to recent domestic and international economic changes, including the ongoing debt restructuring program with both external and internal creditors.
As part of this update, the fiscal framework has been adjusted, maintaining the primary balance target of a 0.5 percent surplus relative to Gross Domestic Product (GDP). Dr. Amin Adam, the Minister of Finance, shared these revisions during the Mid-year Budget Review presentation in Parliament.
“Mr. Speaker, key revisions to the macro-fiscal targets for 2024 include an upward adjustment in the overall real GDP growth rate from 2.8 percent to 3.1 percent; the non-oil real GDP growth rate from 2.1 percent to 2.8 percent; and a reduction in the GDP deflator growth from 20.2 percent to 17.5 percent,” Dr. Adam stated.
He noted that the Nominal GDP had been revised from GH¢1.05 trillion to GH¢1.02 trillion, with non-oil GDP adjusted from GH¢979 billion to GH¢977 billion. The end-period headline inflation was unchanged at 15 percent.
Dr. Adam also mentioned that gross international reserves, including oil funds and encumbered assets, are projected to cover at least three months of imports.
Regarding the fiscal framework, Dr. Adam indicated that total revenue and grants were revised upward by 0.5 percent, increasing from GH¢176.4 billion (16.8 percent of GDP) to GH¢177.2 billion (17.4 percent of GDP). This adjustment reflects an increase in Non-Oil Non-Tax Revenue, which rose from GH¢14.8 billion (1.4 percent of GDP) to GH¢15.6 billion (1.5 percent of GDP) due to dividends from interest accrued in the ESLA accounts.
He further explained that total expenditure on a commitment basis was revised downward by 2.1 percent, from GH¢226.7 billion (21.6 percent of GDP) to GH¢219.7 billion (21.5 percent of GDP). This reduction primarily results from a decrease in interest payments, adjusted downward by GH¢7.9 billion due to the impact of the external debt restructuring on external interest payments.
The Minister noted that the overall balance on a commitment basis was revised from a deficit of GH¢50.3 billion (4.8 percent of GDP) to a deficit of GH¢42.5 billion (4.2 percent of GDP). The cash deficit of GH¢54.1 billion (5.3 percent of GDP) is expected to be financed through both foreign and domestic sources.
Dr. Adam revealed that net foreign financing would total GH¢15.2 billion (1.5 percent of GDP), accounting for 28.1 percent of the total financing for 2024. This foreign financing includes disbursements from the second and third tranches of the International Monetary Fund (IMF) program and funding from the World Bank Development Policy Operation (DPO).
“Mr. Speaker, Domestic Financing will amount to GH¢38.9 billion (3.8 percent of revised GDP), representing 71.9 percent of the total financing for 2024. This will be sourced from short-term domestic debt issuances and inflows from the Ghana Petroleum Funds,” he added.
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