Dr. Cassiel Ato Forson, Ghana’s Finance Minister, highlighted the urgent need for economic reforms during the National Economic Dialogue on March 3, 2025. He discussed the limited growth outside the oil and mining sectors, rising debt levels, and inefficient public spending in education and health. Forson called for actionable solutions to diversify the economy and improve fiscal management.
The Finance Minister of Ghana, Dr. Cassiel Ato Forson, has presented a critical evaluation of the nation’s economic situation, emphasizing the immediate necessity for reforms to rectify fiscal inefficiencies and foster sustainable growth. During the National Economic Dialogue held on March 3, 2025, he noted that while the economy has expanded by an average of 4.4% recently, this growth is predominantly fueled by the oil and mining sectors, showing insufficient progress in structural transformation.
Dr. Forson indicated that agriculture constitutes one-third of the nation’s GDP, whereas manufacturing productivity remains notably low. He raised alarms about the overdependence on primary commodities, as over 85% of exports in 2024 originated from this sector. Moreover, he expressed concern regarding the escalating debt levels in Ghana, which increased from 20% of GDP in 2016 to 93% in 2022.
He remarked, “Persistent fiscal deficits exceeding 4% of GDP between 2008 and 2019 have further strained public finances.” Additionally, he pointed out that non-mandatory expenditures like public sector wages and interest payments account for around 70% of government spending, which detracts from essential investments in infrastructure and social programs.
Dr. Forson was particularly critical of the inefficiencies in public spending, especially in the education and health sectors. He observed that only 25% of education funding is allocated to pre-primary and primary education, whereas less than 60% of the National Health Insurance budget is utilized for claim payments, largely due to resource mismanagement.
He urged for immediate action, stressing the crucial need to diversify the economy beyond resource extraction and improve the efficiency of public spending. “We must reset our economy by addressing these systemic challenges to achieve long-term resilience and inclusive growth,” he stated. The discussion will proceed the next day, with stakeholders expected to propose concrete solutions aimed at stimulating economic transformation and fiscal discipline.
In conclusion, Dr. Cassiel Ato Forson’s remarks underline the urgent need for structural reforms in Ghana’s economy to mitigate fiscal inefficiencies and promote sustainable growth. The overreliance on primary commodities, rising debt levels, and inefficiencies in public spending are critical challenges that must be addressed to ensure long-term economic resilience and development. Stakeholders are anticipated to engage in further discussions to propose practical solutions for these pressing issues.
Original Source: www.gbcghanaonline.com