The Institute for Fiscal Studies (IFS) Ghana has cast doubts on the government’s revised revenue projections for 2024, indicating that they were “out of sync with reality” and not achievable.
The government, in the mid-year budget review, revised its total revenue and grants target from GH¢176.41 billion (16.85 of GDP to GH¢177.22 billion (17.4% of GDP), an increase of 0.6 percentage points from the original 2024 budget projection of 16.8%.
This new target represents a 1.2 percentage point increase from the 2023 outturn of GH¢143.96 billion (16.2% of GDP).
Speaking at a press conference on Ghana’s current fiscal and macro-economic performance, the acting Executive Director of the IFS, Dr Said Boakye, said this projection was overly ambitious, citing historical data showing that the government had never been able to increase total revenue and grants by more than 0.5 percentage points of
GDP in any given year since 2017.
The institute had previously warned that even the original 1 percentage point increase projected in the original 2024 budget was unlikely to be achieved.
Dr Boakye said it was, therefore, surprising that this had been revised upwards to a 1.2 percentage points increase. Adding to the IFS skepticism, he noted that revenue performance in the first half of 2024 even fell short of targets.
Total revenue and grants came in at GH¢74.7 billion, missing the GH¢76.1 billion target by GH¢1.4 billion. Despite this underperformance, the government has, however, increased its full-year revenue projections.
Dr Boakye also questioned the Minister of Finance’s assertion that the upward revision largely reflected an increase in Non-Oil Non-Tax Revenue.
Source: graphiconline
