Finance Minister, Seth Terkper, will be presenting the 2015 Budget Statement and Economic Policy later today, in what analysts say would be driven by significant cuts in government expenditure.
Wednesday's budget reading is expected to outline reforms in the granting of tax exemptions to businesses as part of broad measures to cut waste while focusing on raising revenue.
The presence of austere measures in the 2015 Budget is crucial for Ghana's quest to secure about $800 million in loans from the International Monetary Fund (IMF) in a three-year programme that may begin in January next year.
“This budget will be seen as the most likely sign that Ghana has reached an agreement with the IMF on the measures that it will adopt to qualify for IMF assistance,” Razia Khan, head of Africa research at Standard Chartered Bank Plc in London, told Bloomberg on Tuesday.
According to her, any budget deficit outcome that improves on previously outlined plans will be positive for Ghana's IMF-bailout efforts.
Yvonne Mhango, a sub-Saharan Africa economist at Renaissance Capital is certain Mr Terkper will seek to further lower budget deficit target to 7 percent from 8 percent of GDP by cutting subsidies for fuel and electricity and limiting wage increases.
She told the Bloomberg news network, on Tuesday a reduction in spending and higher interest rates will probably limit economic growth to 4.5 percent in 2015 from a forecast of 5.7 percent this year.
“There's a tight monetary policy in place,” Yvonne Mhango said, in reference to Bank of Ghana raising of borrowing costs by 200 basis points to 21 percent last week to tame inflation, which soared to 16.9 percent in October.
“If you're tightening up on the budget as well, that's going to impact growth”, Bloomberg quoted her as saying.
However other analysts are warning government must be cautious about how it goes about its austere measures -- especially regarding review of tax exempttions -- because it could affect efforts to attract foreign investments into the country.
Also, some local businesses who may be asked to pay for services that they were previously exempted may end up passing it on to consumers, the analysts say.
Government is also expected to outline additional measures in the 2015 budget to check the rising wage bill for public sector workers.
This could see government freeze any increment in wages and possible staff rationalization in the public sector.
Chair of Parliament's Finance committee James Avedzi says these measures have become necessary because of current economic challenges.