Finance Minister Dr. Cassiel Ato Forson presented the 2025 budget under President John Mahama’s new administration, emphasizing economic recovery, job creation, and fiscal discipline.

Why It Matters

Ghana faces a severe economic crisis with high debt, inflation, and fiscal mismanagement. The government’s strategy focuses on restructuring debt, stabilizing the cedi, and cutting wasteful spending while introducing pro-growth policies like a 24-hour economy.

Key Highlights:

State of the Economy

• Inflation rose from 23.2% in 2023 to 23.8% in 2024, surpassing targets.
• Public debt reached GH¢726.7 billion (61.8% of GDP).
• The government owes GH¢67.5 billion in arrears, with road contractors alone owed GH¢21 billion.
• Energy sector shortfalls cost GH¢20.8 billion in 2024, with projected deficits of GH¢35 billion in 2025.
• The cocoa sector is in crisis, with production dropping by 50% and COCOBOD facing GH¢32 billion in debt.

Fiscal Measures

• Government spending cuts: Ministries reduced from 30 to 23; total ministers from 88 to 60.
• Debt management: Plans to build fiscal buffers and smoothen repayment schedules.
• Mandating commencement certificates and integrating procurement systems (GHANEPS with GIFMIS) to curb overspending.
• Eliminating wasteful programs like GhanaCARES, YouStart, and One District One Factory, and reassigning Development Authorities’ roles to District Assemblies.
• Exchange rate stability: Establishing a Ghana Gold Board to accumulate forex reserves.

Macroeconomic Targets and Stabilization Measures

The budget sets ambitious targets for 2025:

• Overall real GDP growth of at least 4.0%.
• Non-oil real GDP growth of at least 4.8%.
• End-period inflation of 11.9%.
• Primary balance surplus of 1.5% of GDP.
• Gross International Reserves covering at least three months of imports.

Tax Reforms

Abolished

• E-Levy (1% mobile money tax)
• Betting tax (10% on lottery winnings)
• Emission levy on industries and vehicles
• VAT on motor vehicle insurance

New tax adjustments

• Increased mining levy to capture gold price windfalls
• Road tolls reintroduced using digital payments

Key Initiatives

• 24-hour economy: Encouraging round-the-clock business operations.
• Big Push infrastructure plan: $10 billion investment in roads, markets, and hospitals.
• Free first-year tertiary education under ‘No-Fees-Stress’ initiative.
• Free sanitary pads for schoolgirls and increased funding for school feeding.
• Reducing the tax refund ceiling from 6% to 4%, saving GH₵3.8 billion to offset revenue losses.
• Labour export program: Formalizing Ghanaian workers’ migration to secure jobs abroad.
• Social Protection: GH₵499.8 million for free first-year tertiary fees, GH₵292.4 millionfor sanitary pads, GH₵9.93 billion for NHIS (including free primary healthcare and MahamaCares), and increased allocations for LEAP, School Feeding, and Capitation Grant.
• Reintroducing technology-driven road tolls and strengthening non-tax revenue frameworks.

Source: https://techlabari.com/key-highlights-of-ghanas-2025-budget/