The government’s 4% real GDP growth target for 2025 is realistic and attainable, considering the 5.7% growth recorded in 2024, accounting and auditing firm Deloitte has said.
It has, however, noted that the expected slowdown is largely due to the government’s fiscal tightening and aggressive expenditure cuts, which could limit the rollout of key policies and programs.
Reviewing the 2025 budget statement, Deloitte posited that the need for the government to reverse the trend of high budget deficits, which averaged 7.5% between 2021 and 2024.
With the projected 3.1% deficit for 2025, Deloitte believes this signals fiscal prudence, a key requirement under the IMF Extended Credit Facility (ECF) program.
It also supports the government’s cautious spending approach, noting that it could help restore investor confidence and macroeconomic stability.
“As already indicated, government intends to prioritise fiscal discipline in its bid to stabilise the economy whilst achieving an appreciable level of growth. It is therefore, commendable to see the adoption of some expenditure rationalisation measures in the budget,” it said.
Deloitte in its report said “Having already showed clear intention to contain government expenditure by reducing the number of ministers and ministries, it is refreshing to also note that the 2025 budget for the goods and services component of the expenditure budget reflects a 39 per cent decrease from the 2024 actual amount.”
According to Deloitte this further “gives credence to the President’s commitment to cut waste and prioritise cost efficiency going forward.”
It added that the other expenditure rationalisation measures such as government’s resolve to enforce the Public Financial Management Act across all public entities, integrating the financial management systems and prioritising value for money in public procurement could potentially increase transparency, reduce waste and curb corrupt practices in government spending.
Deloitte however stated that “Whilst commending government for its expenditure rationalisation commitments, it is important to note that, without strong controls and systems to accompany the implementation of these expenditure rationalisation measures, we may be unable to achieve the set objectives.”
Deloitte advised the government to properly resource the Internal Audit Agency (IAA) to allow for it to adequately perform its mandated function of auditing the SOEs to ensure strict compliance to the proposed measures.
“Whilst the Minister’s statement in paragraph 295 of the budget speech indicate expected decrease in total expenditure by 3.8 per cent from GH¢279.2 billion in 2024 to GH¢269.1 in 2025, the detailed breakdown of the expenditure, which was presented as Appendix 2C and 3C in the full budget statement, rather indicate expected increase in the total expenditure by 18.8 per cent from provisional outturn GH¢226.2 billion in 2024 to GH¢268.7 billion in 2025,” it added.
By: Rainbowradioonline.com/Ghana
