Professor John Gatsi, Dean of the University of Cape Coast Business School, has underscored the importance of credible macroeconomic policies in achieving Ghana’s growth and stability goals.
Speaking at a parliamentary budget workshop, he highlighted the government’s efforts to reduce the fiscal deficit from 7.9% to 3.1% on a commitment basis, curtail expenditure, and shift the primary balance from a 3.9% deficit to a 1.5% surplus. These measures, he argued, require moderate economic growth to ensure credibility and sustainability.
Gatsi cautioned against overly optimistic growth targets, noting that while Ghana’s 2024 growth rate exceeded benchmarks set by ECOWAS, sub-Saharan Africa, and emerging markets, setting unrealistic projections risks undermining confidence. “The 2025 growth forecast aligns with prudent practices, as achieving high targets like 11.9% demands unwavering focus and structural reforms,” he said.
The economist emphasized that Ghana’s current fiscal strategy prioritizing deficit reduction, inflation control, and targeted social and infrastructure investments is critical to building investor and public trust. However, he noted persistent gaps in meeting ECOWAS standards on budget deficits, inflation, and debt sustainability, despite progress in lowering the debt-to-GDP ratio.
Gatsi pointed to unresolved structural challenges, including arrears accumulation and delayed reforms, as barriers to long-term stability. “Policy measures on paper are sound, but execution requires absolute commitment,” he stated, stressing the need for disciplined implementation to achieve a positive primary balance and sustainable growth.
Ghana’s fiscal consolidation efforts come amid regional economic pressures, with many African nations grappling with high debt and inflation. While the country’s recent growth outperforms peers, reliance on external debt restructuring and IMF programs underscores vulnerabilities. The success of its fiscal strategy hinges on balancing austerity with strategic investments to stimulate productivity without exacerbating social inequities.
As policymakers refine budget priorities, Gatsi’s analysis highlights the delicate interplay between fiscal restraint and growth ambitions. Credible targets, transparent governance, and consistent reforms will determine whether Ghana can transition from stabilization to inclusive, resilient economic expansion.
