In its
The African Markets Revealed Report is a monthly report issued by the
The report also reviews current economic situations and makes short to medium-term predictions about the economies of African countries.
"The path to fiscal consolidation may take a further four years as the government does not expect to return to within the Fiscal Responsibility Act threshold of five per cent of Gross Domestic Product (GDP) until at least 2024. In fact, most African economies foresee some two to four years to fiscal consolidation given the disruption to economic activity and consequent impact on government revenues amid rising social costs," it said.
The report however, stated that fiscal consolidation faster than that would be desirable given high interest payments and debt service costs."
This, according to the report, comes at the back of a projected fiscal deficit of 9.5 per cent in 2021. The report further noted that improvement in
The report said "The government projects a 9.5 per cent fiscal deficit-to-GDP ratio for 2021 amid rising social expenditure and interest payments, from 11.7 per cent recorded in 2020. Including financial sector costs, fiscal deficit-to-GDP was 13.7 per cent in 2020. Much of the progress on fiscal consolidation will depend of how quickly the economy can recover after the pandemic. The government forecasts growth of five per cent year-on-year for 2021, roughly matching our base case of 4.8 per cent year on-year where we expect external demand to rebound more meaningfully in H2:21 due to vaccinations across the globe."
The report further cautioned the government on its debt levels given the pace of growth of external commercial debt over the past few years.
It noted that "though
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