The 2025 Budget, presented by Finance Minister Dr. Cassiel Ato Forson on March 11, 2025, outlines the government’s economic policies and fiscal measures aimed at stabilizing the economy, creating jobs, and promoting inclusive growth.
The budget reflects the administration’s commitment to resetting Ghana’s economy by addressing inherited challenges, implementing bold reforms, and introducing social interventions to improve the lives of citizens. Below are the key highlights from the speech:
1. Theme of the Budget
The theme of the 2025 Budget is “Resetting the Economy for the Ghana We Want.” It aims to address economic challenges, restore stability, and promote job creation.
2. Economic Challenges and Inherited Issues
The government inherited an economy in deep crisis with high debt and fiscal risks. Exchange rate instability and inflation remain key concerns for businesses. Government arrears currently stand at GH¢67.5 billion, with additional commitments of GH¢194 billion. Over the next four years, debt service obligations will amount to GH¢150.3 billion, with major payment burdens in 2027 and 2028.
3. Key Policy Announcements
A 24-Hour Economy will be introduced to boost productivity and job creation. The government will also establish the Ghana Gold Board to regulate and manage gold reserves. To cut costs, the number of government ministries will be reduced from 30 to 23, while the number of ministers will be reduced from 88 to 60.
4. Macroeconomic Targets for 2025
The government has set a GDP growth target of 4.0% and a 4.8% target for non-oil GDP growth. The end-year inflation target is 11.9%, while the primary budget surplus is expected to be 1.5% of GDP.
5. Major Expenditure Plans
The Big Push Programme for infrastructure will receive GH¢13.85 billion. The government has allocated GH¢3.5 billion for Free SHS, with additional funding from the uncapped GETFund. The National Health Insurance Scheme (NHIS) will receive GH¢9.93 billion, while GH¢1.5 billion has been earmarked for the establishment of a Women’s Development Bank.
6. Revenue Measures and Tax Reforms
Several “nuisance taxes” will be abolished, including the 10% tax on betting winnings, the 1% E-Levy, VAT on motor vehicle insurance, and the Emission Levy. The Growth & Sustainability Levy on mining companies will increase from 1% to 3% to ensure the nation benefits from rising gold prices. The government will also reintroduce road tolls with a technology-driven collection system.
7. Measures to Stabilize the Economy
The government plans to strengthen foreign exchange reserves through gold accumulation. It will also implement aggressive fiscal consolidation by reducing government spending while improving tax compliance and restructuring the VAT system.
8. Social Interventions
The government will introduce a No-Academic-Fee policy for all first-year students in public universities. Free sanitary pads will be distributed to female students in primary and secondary schools. The school feeding programme will be expanded, with an increased feeding cost per child. Additionally, GH¢242.5 million has been allocated to support victims of the Akosombo Dam spillage.
9. Addressing Sector-Specific Challenges
In the energy sector, the government will negotiate with Independent Power Producers (IPPs) to reduce costs. In the cocoa sector, it will address debt challenges and increase farmer revenue. The financial sector requires GH¢10.45 billion to address legacy issues from past banking reforms.
10. Government’s Commitment
The government emphasized its commitment to delivering on its promises. It highlighted key achievements, such as downsizing government, abolishing E-Levy, and improving funding for education and healthcare.
The 2025 Budget sets the stage for restoring economic stability, driving job creation, and strengthening social welfare. With a commitment to fiscal discipline and rebuilding trust in public institutions, the government is pushing forward with bold reforms to reset the economy.
The Finance Minister further called for the collective support of Parliament, businesses, and citizens, emphasizing that their collaboration will be crucial in shaping Ghana’s economic recovery and future growth.
Last Updated on March 14, 2025 by samboadu
