Global firm, Deloitte has expressed concerns about the high debt profiles of Ghana and Nigeria.
According to the professional services firm, this poses a risk to the growth outlook.
It disclosed this in its Global Economic Outlook January 2025.
“Fiscal policy in West Africa revolves around two main themes, revenue mobilization and debt restructuring/sustainability. Nigeria and Ghana both have high debt profiles”.
It stressed that Ghana has an ongoing debt-restructuring plan that has helped it secure an International Monetary Fund (MF) package and disbursements alongside securing agreements with its lenders.
On the other hand, Nigeria is facing rising debt levels amid low revenue generation.
Deloitte advised that the widening fiscal gap caused by the new minimum wage will have to be bridged by either new borrowings or an increase in revenue.
It continued that generating more revenue implies higher taxes and tariffs, which has an inflationary effect.
Policy Rate Cut
Meanwhile, it expects more aggressive monetary policy rate cuts in 2025 as inflation falls towards single digits.
This it believes will spur an increase in domestic demand and the overall aggregate output of the Ghanaian economy.
Inflation declined by 0.3 percentage points to 23.5% in January 2025, signalling further ease in the coming months.
Interest rates also went down for the first time in several weeks.
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