Ghana's budget proposals likely to prove unfeasible

Significance

The government plans to increase government spending to 58.1 billion cedis (12.5 billion dollars), up 13.7% from 2016, while reducing the fiscal deficit to 6.5% of GDP from 8.7% last year. The government has assured supporters it will keep campaign promises to cut taxes and increase infrastructure spending, despite the larger-than-expected fiscal hole in government accounts.

Impacts

• Increased oil revenues will have a relatively small impact on government finances, despite the almost 40% expected increase in output.
• The government will likely renege on several election promises after admitting that it cannot deliver double-digit growth this year.
• Plans to pay down foreign debt this year may be unachievable given overly ambitious revenue targets.