According to Fitch Solutions, a research and investment advice organization, Ghana's government will need to take certain risky actions to lessen the effects of the current economic woes on the nation.

Fitch claims that the government must choose between drastically increasing tax revenue or drastically cutting spending.

Fitch Solutions went on to say that "the government basically only has two options at this point to improve the fiscal position; either capital expenditure or considerably expanding the countries revenue base."

The firm noted that whatever step the government decides to take will be difficult therefore, “they are no easy choices for the government”.

Ghana’s debt levels have increased according to Fitch, due to the high-interest payment and excessive borrowing.

“Expenditure has risen and this is driven by interest expenditure. Ghana took a lot of expensive debt and continue to borrow during the pandemic and this means interest payments are very elevated now,” it noted.

“They account for about 55% of total government fiscal intake, keeping expenditure elevated. Given the rigid nature of Ghana’s expenditure profile, the government cannot easily reform spending resulting in that wide fiscal deficit,” the firm added.

Fitch also noted that the government must be proactive in securing an IMF deal as soon as possible.

“As part of an IMF deal, however, we expect that the government will have to implement fiscal consolidation measures in 2023 including the widening of the tax base. We expect that the commitment to fiscal consolidation will lead to gradual improvement in public finances,” Fitch added.

“And we also expect the government to be quite eager to meet the IMF target as the authorities will aim to restore investor sentiments and so regain access to international capital markets,” it concluded.