Key Highlights of Ghana’s 2025 Budget

Ghana’s 2025 budget, presented by Finance Minister Dr. Cassiel Ato Forson, focuses on economic recovery, job creation, and fiscal discipline amid a profound economic crisis. Key highlights include rising inflation, significant public debt, and measures to curb wasteful spending, such as reducing ministries and ministers. The government has set ambitious economic targets alongside several tax reforms and initiatives aimed at stimulating growth and addressing social needs.

In the 2025 budget presented by Finance Minister Dr. Cassiel Ato Forson under President John Mahama’s administration, economic recovery, job creation, and fiscal discipline were emphasized as paramount objectives. This is particularly significant given Ghana’s ongoing economic crisis characterized by high debt, inflation, and challenges stemming from fiscal mismanagement.

The current state of Ghana’s economy reveals troubling statistics, with inflation increasing from 23.2% in 2023 to 23.8% in 2024, exceeding targets. The public debt has reached GH¢726.7 billion, accounting for 61.8% of GDP, accompanied by GH¢67.5 billion in arrears, particularly to road contractors. Furthermore, the energy sector has incurred shortfalls amounting to GH¢20.8 billion in 2024, projected to rise to GH¢35 billion in 2025, while cocoa production has seen a dramatic decline of 50%, leaving COCOBOD burdened with GH¢32 billion in debt.

Fiscal measures in the budget focus on substantial government spending cuts, reducing ministries from 30 to 23 and limiting the total number of ministers from 88 to 60. The government aims to enhance debt management by establishing fiscal buffers and optimizing repayment schedules. Measures such as mandating commencement certificates and integrating procurement systems aim to reduce overspending, with plans to eliminate wasteful programs like GhanaCARES and reassess the roles of Development Authorities.

To stabilize the exchange rate, the establishment of a Ghana Gold Board is proposed, which will help in accumulating foreign exchange reserves. The budget sets ambitious macroeconomic targets for 2025, including a minimum overall real GDP growth of 4.0%, non-oil growth of at least 4.8%, end-period inflation set at 11.9%, and a primary balance surplus of 1.5% of GDP, alongside gross international reserves sufficient to cover three months of imports.

Significant tax reforms were introduced, including the abolition of the E-Levy (a 1% mobile money tax), a betting tax on lottery winnings, emission levies on industries, and VAT on motor vehicle insurance. New adjustments include increasing the mining levy to capture gains from gold price fluctuations and reintroducing road tolls paid via digital systems.

Key initiatives encompass the promotion of a 24-hour economy to stimulate business operations, a monumental $10 billion investment in infrastructure, free first-year tertiary education as part of the ‘No-Fees-Stress’ initiative, and the provision of free sanitary pads for schoolgirls. Additionally, the budget aims to save GH₵3.8 billion by lowering the tax refund ceiling from 6% to 4% while formalizing a labor export program to enable Ghanaians to secure jobs overseas.

Social protection measures allocate GH₵499.8 million for free tertiary education, GH₵292.4 million for sanitary pad provision, and GH₵9.93 billion for the National Health Insurance Scheme, which includes free primary healthcare alongside increased funding for various social programs. The approach also includes reintroducing technology-driven road tolls to fortify non-tax revenue frameworks.

The 2025 budget presented by Ghana’s Finance Minister reflects a comprehensive plan aimed at addressing the nation’s economic challenges through strategic fiscal measures and targeted initiatives. The emphasis on restructuring debt, reducing inflation, and enhancing job creation underscores the administration’s commitment to recovering from a significant fiscal crisis. By setting ambitious macroeconomic targets and initiating crucial reforms, the government seeks to promote sustainable economic growth and stability, while also addressing social protection needs and supporting vulnerable populations within the country.

Original Source: techlabari.com