The Minister for Finance, Dr. Cassiel Ato Forson, has presented the 2025 Budget Statement and Economic Policy to Parliament, outlining the government's ambitious plan to "Reset the Economy for the Ghana We Want." This budget, the first under President John Dramani Mahama’s new administration, aims to tackle Ghana’s pressing economic challenges while setting a path for stability, job creation, and fiscal discipline.
A Troubled Economic Inheritance
Dr. Forson painted a grim picture of the state of the economy inherited by the government. He described it as being in “deep crisis,” characterized by excessive debt, fiscal mismanagement, and massive arrears owed to government contractors and suppliers. The Minister revealed that total government arrears had reached GH¢67.5 billion by the end of 2024, excluding debts owed by institutions such as the Electricity Company of Ghana (GH¢68 billion), COCOBOD (GH¢32 billion), and Independent Power Producers (US$1.73 billion).
Inflation worsened from 23.2% in 2023 to 23.8% in 2024, exceeding the budget target of 15%. The Ghanaian cedi also experienced significant depreciation, losing 19.2% of its value against the U.S. dollar in 2024. Additionally, the financial sector remains fragile despite GH¢30.3 billion spent on the sector’s clean-up in recent years, with an estimated GH¢10.45 billion still needed to address outstanding risks.
Key Economic and Fiscal Policy Measures
The government has pledged to implement strong measures to restore fiscal stability and economic growth. These include:
• Reduction in Government Size: President Mahama has reduced the number of ministries from 30 to 23 and cut the number of ministers from 88 to 60.
• Debt and Fiscal Management: Ghana will reintroduce fiscal discipline by strictly adhering to the Public Financial Management Act and implementing a spending-led fiscal adjustment to reduce inflation and borrowing.
• Revenue Reforms and Tax Cuts: Several unpopular taxes will be abolished, including the E-Levy (1%), the 10% betting tax, the VAT on motor vehicle insurance, and the emission levy. At the same time, government will increase revenue by improving tax compliance and raising the mining sector’s Growth and Sustainability Levy from 1% to 3%.
• Strengthening the Cedi: The establishment of the Ghana Gold Board (GOLDBOD) will help accumulate forex reserves and stabilize the cedi.
Ambitious Social and Economic Programs
The 2025 Budget also outlines various initiatives aimed at reducing hardship and creating economic opportunities. These include:
• 24-Hour Economy Policy: Designed to stimulate economic growth by promoting round-the-clock business operations in three shifts of eight hours each.
• Infrastructure Development (Big Push Programme): A US$10 billion initiative focused on large-scale projects, including roads, schools, and hospitals.
• Education Reforms: The government has uncapped the Ghana Education Trust Fund (GETFund) to fully finance free secondary education and provide free tertiary education for persons with disabilities. An allocation of GH¢3.5 billion has been set aside for free SHS, with an additional GH¢499.8 million for a ‘No-Fees-Stress’ initiative for first-year public university students.
• Healthcare Improvements: The National Health Insurance Levy (NHIL) has been uncapped, and GH¢9.93 billion has been allocated for primary healthcare, NHIS, and the MahamaCares program.
• Support for Women and Youth: GH¢51.3 million has been allocated to establish the Women’s Development Bank, GH¢300 million for a National Apprenticeship Programme, and GH¢100 million for the ‘Adwumawura’ job creation initiative.
Restoring Confidence and Economic Growth
Despite the challenges, Dr. Forson remains optimistic about Ghana’s economic prospects. The government has set a target of 4.0% GDP growth in 2025, non-oil GDP growth of 4.8%, and a primary budget surplus of 1.5% of GDP. The budget also prioritizes reducing inflation to 11.9% by the end of 2025 while increasing gross international reserves to cover at least three months of imports.
A Call for Unity and Shared Sacrifice
Concluding his speech, Dr. Forson urged Parliament and Ghanaians to support the government’s bold reforms. He emphasized that fixing the economy requires transparency, discipline, and shared sacrifices from all sectors.
“This budget is not just about numbers—it is a blueprint for growth, stability, and opportunity,” he stated.
As Ghana embarks on this economic reset, all eyes will be on the Mahama administration to see if these ambitious plans translate into real economic relief for the people.