Ghana faces potential revenue shortfall of GH¢1.8 billion

Government is facing a potential revenue shortfall of GH¢1.8 billion, which could impact its 2024 tax revenue target of GH¢143.1 billion and the end-of-year fiscal deficit target of 5.9%.

This shortfall is due to the suspension of the 15% VAT on residential electricity consumers, prompting the government to seek alternative measures to fill the gap.

Efforts to address

Read full articlethe revenue gap include the introduction of a VAT on electricity, although this measure was temporarily suspended following opposition from stakeholders.

Minister of Finance, Dr. Mohammed Amin Adam, stated that discussions are ongoing to find alternative ways to meet the fiscal targets set in the 2024 budget and the IMF programme.

“The amount involved is GH¢1.8 billion, and if you have that shortfall, it will certainly affect your fiscal balances.

“So there is a need to look at how to fill in that gap. We are having discussions among ourselves on alternative arrangements to fill that gap so we can achieve the fiscal target that we negotiated in the 2024 budget and the IMF programme,” the Finance Minister told Graphic Business.

Dr. Amin Adam reiterated the government's commitment to fiscal targets and its efforts to create an enabling environment for the Ghana Revenue Authority (GRA) to collect more revenues.

“We are committed to collecting the revenues that we have budgeted for. I have recently gone around to engage officials of the Ghana Revenue Authority (GRA) and some customs officials at the Tema port. “We are also going round to all the revenue centres to see the conditions under which they work, their challenges, and how we can address them.”

Meanwhile, the IMF has expressed openness to discussing alternative measures to achieve fiscal consolidation and debt sustainability, emphasizing the importance of aligning revenue measures with programme objectives.

During her visit to Ghana, International Monetary Fund (IMF) Managing Director Kristalina Georgieva noted that achieving macroeconomic stability may require sacrifices from Ghanaians but emphasized that Ghana's situation is not as severe as other countries that have undergone economic crises.

She encouraged Ghanaians to manage their expectations and focus on strong economic fundamentals for a competitive and prosperous country.