The 2025 budget presented by Ghana’s Finance Minister Dr. Cassiel Ato Forson focuses on economic recovery, job creation, and fiscal discipline. Key highlights include measures to address inflation and public debt, ambitious macroeconomic targets, tax reforms, and social initiatives aimed at supporting education and health programs. The government aims to stabilize the economy while implementing pro-growth policies and cutting wasteful spending.
The 2025 budget for Ghana, presented by Finance Minister Dr. Cassiel Ato Forson, emphasizes economic recovery, job creation, and fiscal discipline under President John Mahama’s administration. In light of Ghana’s ongoing economic crisis characterized by high debt and inflation, the government’s strategic focus includes debt restructuring, stabilizing the cedi, and implementing pro-growth policies aimed at curtailing wasteful spending while encouraging a 24-hour economy.
The current economic indicators are concerning, with inflation rising from 23.2% in 2023 to 23.8% in 2024, alongside public debt reaching GH¢726.7 billion (equivalent to 61.8% of GDP). The government also faces GH¢67.5 billion in arrears, notably with road contractors owed GH¢21 billion. The energy sector has been a significant burden, costing GH¢20.8 billion in 2024 and projected to incur GH¢35 billion in deficits for 2025. Furthermore, the cocoa industry is in crisis, with production slashing by 50% and COCOBOD struggling under GH¢32 billion in debt.
To address these challenges, the government is implementing various fiscal measures, including reducing the number of ministries from 30 to 23 and cutting the number of ministers from 88 to 60. A plan for better debt management is in place, which focuses on building fiscal buffers and smoothing repayment schedules. There will be integration of procurement systems to prevent overspending, alongside the elimination of unnecessary programs such as GhanaCARES and YouStart, while the roles of Development Authorities will be reassigned to District Assemblies.
The budget establishes ambitious macroeconomic targets for 2025, such as a minimum real GDP growth of 4.0%, non-oil real GDP growth of at least 4.8%, an end-period inflation target of 11.9%, and a primary balance surplus of 1.5% of GDP. Additionally, the Gross International Reserves aim to cover at least three months of imports.
Significant tax reforms include the abolishment of the E-Levy (1% mobile money tax), betting tax on lottery winnings, emission levies on industries, and VAT on motor vehicle insurance. New tax measures involve increasing the mining levy to capture gold price windfalls and reintroducing road tolls through digital payment methods.
Key initiatives featured in the budget represent a proactive approach to economic development. Noteworthy proposals include promoting a 24-hour economy, a $10 billion investment in infrastructure, and offering free first-year tertiary education under the ‘No-Fees-Stress’ initiative. The budget also allocates funds for free sanitary pads for schoolgirls and increases support for school feeding programs.
In terms of social safety nets, the government has earmarked GH₵499.8 million for free first-year tertiary education, GH₵292.4 million for sanitary pads, GH₵9.93 billion for the National Health Insurance Scheme (NHIS), and increased funding for various welfare programs. By reintroducing technology-driven road tolls and enhancing non-tax revenue frameworks, the government aims to fortify its financial position while maintaining focus on social protection.
The 2025 budget for Ghana, presented by Dr. Cassiel Ato Forson, highlights the government’s commitment to fiscal discipline, economic recovery, and strategic planning. As Ghana faces substantial economic challenges including rising debt and inflation, the measures outlined aim to stabilize the economy while promoting growth through targeted reforms and social initiatives. The ambitious targets set forth demonstrate a focused effort to enhance fiscal management and foster long-term economic stability.
Original Source: techlabari.com
