In anticipation of the general elections scheduled for December 2024, Fitch Solutions is forecasting a notable rise in public expenditure.

Providing further details on its projection, the UK-based financial firm suggests that the ruling New Patriotic Party (NPP) is expected to engage in substantial spending efforts to garner public support in its competition against the National Democratic Congress (NDC), Ghana's primary opposition party.

“A more expansionary fiscal stance will inject additional demand into the economy. While the authorities have confirmed their commitment to implementing fiscal reforms in line with Ghana’s IMF programme, we anticipate significant public expenditure overruns ahead of the December 2024 general election, particularly given that the ruling New Patriotic Party (NPP) trails behind in the polls,” parts of a report from Fitch Solutions read.

According to Fitch Solutions, in the last century, the expenditure of successive governments during election years has increased by 3.0 per cent, representing the government’s tendency to subsidise utilities and implement social welfare programmes to garner public support.

“We anticipate that such measures will be implemented again in 2024, improving disposable incomes and stimulating household spending. All told, we forecast private consumption growth to tick up to 3.8% in 2024, up from 3.2% in 2023, contributing 2.9 percentage points to headline real GDP [Gross Domestic Product] growth.”.

Furthermore, the probable initiation of social support programs leading up to the December 2024 elections is expected to bolster disposable incomes and stimulate domestic consumption.