Ghana Government Projects Total Revenue and Grants of GH¢223.8 Billion for 2025

Ghana’s projected total revenue and grants for 2025 are GH¢223.8 billion, reflecting a slight decrease in GDP percentage. Total expenditures are programmed at GH¢269.1 billion, showing a decline from 2024. The overall budget indicates a commitment deficit and outlines foreign and domestic financing strategies, indicating fiscal adjustments amidst economic challenges.

The Government of Ghana has projected its total revenue and grants for the fiscal year 2025 to reach GH¢223.8 billion, constituting 17.2 percent of the Gross Domestic Product (GDP). This marks a slight decrease from the previous year, where it was GH¢186.5 billion or 17.4 percent of GDP. The forecast is supported by anticipated non-oil revenue measures expected to contribute at least 0.5 percent of GDP.

During the presentation of the 2025 Budget Statement and Economic Policy to Parliament, Finance Minister Dr. Ato Baah Forson revealed that total expenditures are programmed at GH¢269.1 billion, which is 20.7 percent of GDP, a decrease from GH¢279.2 billion or 26.0 percent of GDP in 2024. This indicates a significant retraction in government spending as budgeting is adjusted to align with current economic conditions.

The primary expenditure, excluding interest payments, is projected at GH¢204.7 billion, amounting to 15.8 percent of GDP in 2025, a notable reduction from GH¢232.4 billion or 21.7 percent in 2024. As per the fiscal allocations, the total appropriation for the year ending December 31, 2025, is GH¢290,971,212,435.

Dr. Forson mentioned an anticipated overall balance on a commitment basis will indicate a deficit of GH¢43.8 billion, equivalent to 3.1 percent of GDP. This primary balance on a commitment basis is projected to result in a surplus of GH¢20.3 billion or 1.5 percent of GDP. When assessed on a cash basis, the overall balance reflects a deficit of GH¢56.9 billion, equal to 4.1 percent of GDP.

Moreover, the Minister indicated that the surplus on a cash basis is estimated at GH¢7.3 billion or 0.5 percent of GDP. The cash deficit of GH¢56.9 billion is expected to be financed through a combination of foreign and domestic sources, with total foreign net financing estimated at GH¢21.4 billion, representing 1.5 percent of GDP. This foreign financing is to include funding from the IMF Extended Credit Facility and the World Bank Development Policy Operation, amounting to $720 million and $600 million, respectively.

The remaining domestic financing, expected to total GH¢36.9 billion or 2.6 percent of GDP, will be 65.0 percent of the total financing for 2025, primarily sourced from debt issuances in the domestic market.

In summary, the Ghanaian government’s fiscal policy for 2025 anticipates a total revenue and grants of GH¢223.8 billion, while aiming to decrease total expenditure. The proposed budget reflects an overall deficit and outlines strategies for financing, predominantly from foreign sources, alongside domestic debt issuance. This financial plan emphasizes fiscal prudence in a challenging economic landscape.

Original Source: www.ghanabusinessnews.com