Fiscal consolidation efforts in Sub-Saharan Africa (SSA), including Ghana, are expected to gain renewed momentum in 2025, according to a recent report by Fitch Solutions titled “Sub-Saharan Africa Macro Key Themes for 2025: Stronger Headline Growth but Structural Vulnerabilities Exist.”

The report highlights that while fiscal progress will be prioritized, it will continue to face significant structural challenges.

“In 2024, fiscal slippage occurred in key economies like South Africa, Nigeria, and Ghana, partly driven by election-related expenditures and public resistance to government efforts to enhance revenue collection,” Fitch Solutions observed.

With major elections concluded and cost-of-living pressures easing, governments in the region are anticipated to adopt more determined approaches toward fiscal consolidation in 2025.

The report projects that the overall SSA budget deficit will narrow from 4.3% of GDP in 2024 to 3.9% in 2025.

However, this remains above the 2010-2019 average of 3.2%.

Notably, 27 out of 49 SSA countries, including Nigeria, Ethiopia, Ghana, the Democratic Republic of Congo, Côte d’Ivoire, and Uganda, will continue to experience fiscal deficits higher than their respective averages for the 2010-2019 period.

The report also suggests that lower average inflation rates across the region will prompt central banks to continue or initiate monetary easing cycles, fostering greater convergence in monetary policies across SSA.

However, it cautioned that unique challenges in large economies, such as Nigeria and Ethiopia, will contribute to regional inflation rates remaining above the 2014-2023 average of 11.4%.