The government’s decision to maintain the current tax levels in the Mid-Year Budget Review offers some relief to businesses and individuals, as further tax increases could hinder the productivity of the private sector, according to Deloitte Ghana’s analysis of the 2024 Mid-Year Review Budget.

Deloitte noted that the business environment is already burdened by high inflation and exchange rate depreciation, making this decision crucial to mitigate business hardships.

Debt restructuring and the International Monetary Fund programme have reduced the country’s interest payments from GH?5.9 billion (the largest expenditure item) to GH?48.0 billion (the second largest expenditure item).

Deloitte believes this reduction will provide the necessary fiscal space to implement key government programmes aimed at revitalising and transforming the economy.

The Government of Ghana projects an increase in capital expenditure from 2.5% of Gross Domestic Product (GDP) in 2023 to 2.8% of GDP in 2024.

Deloitte highlighted that this forecast indicates a strong focus on improving social infrastructure and other essential amenities amidst the fiscal consolidation programme, stating, “Allocating such spending to priority sectors can drive robust economic performance in the medium to long term.”

Deloitte further noted that the reduction in total expenditure in the 2024 mid-year budget review is expected to come from savings on interest payments, which have decreased from GH?55.9 billion to GH?48.0 billion due to the completion of external debt restructuring (covering bilateral, multilateral, and Eurobond debts).