Deloitte: Ghana’s 4% GDP Growth Target for 2025 Feasible but Faces Key Risks

Deloitte has affirmed that Ghana’s 4% GDP growth target for 2025 is achievable, especially following the 5.7% growth recorded in 2024. However, the accounting and auditing firm highlights that the expected slowdown is primarily due to the government’s fiscal tightening and aggressive expenditure cuts. These measures, while aimed at controlling the budget deficit, could limit the implementation of key policies and programs necessary for continued growth.

In its review of Ghana’s 2025 budget, Deloitte stressed the need for the government to address its persistent budget deficits, which averaged 7.5% from 2021 to 2024. With a projected deficit of 3.1% in 2025, the firm sees this as a positive sign of fiscal prudence, which aligns with the conditions set by the IMF’s Extended Credit Facility program. The cautious approach to spending is also seen as a way to restore investor confidence and promote macroeconomic stability.

Despite endorsing the government’s spending restraint, Deloitte cautions that the need for economic expansion remains urgent, especially to combat rising unemployment. While investments in high-growth sectors are prioritized, the firm warns that balancing austerity measures with job creation will be a difficult task in the coming year. The focus on fiscal responsibility must not overshadow the need for economic policies that drive employment.

Deloitte’s primary concern revolves around the rising debt and arrears in the energy sector, which could threaten the country’s growth prospects. The firm emphasizes that consistent and reliable power supply is vital for industrial growth, urging the government to engage with stakeholders and take swift action to resolve these debts. Failure to do so could derail the projected economic recovery and growth.

source: citi newsroom