Hon. Abena Osei-Asare, Former Deputy Minister of Finance has raised concerns over the government’s 2025 Budget, arguing that it is riddled with contradictions that undermine its stated objectives of fiscal discipline, revenue optimization, debt reduction, and economic stability.
The government claims to be rationalizing expenditure, yet the 2025 Budget increases total spending significantly: 2024 Expenditure: GHS 226 billion, 2025 Expenditure: GHS 268.7 billion and Appropriation for 2025: GHS 290.7 billion, exceeding 2024’s GHS 250 billion.
Hon. Osei-Asare also highlights a 729% surge in compensation for Office of Government Machinery (OGM) staff from GHS 326 million in 2024 to GHS 2.7 billion.
Additionally, the budget allocates GHS 70 million for an ambiguous ‘Research Department’ under OGM while earmarking only GHS 51.3 million for the Women’s Development Bank.
The budget claims to optimize domestic revenue collection but fails to present sustainable alternatives after removing key taxes, including the E-Levy and COVID-19 levy, which previously generated around GHS 5 billion. Meanwhile, the Growth and Stability Levy increases from 1% to 3%, a move many businesses struggle with.
The government’s gold-backed economic strategy (GoldBod) is also under scrutiny, with a GHS 279 million allocation despite concerns about its feasibility and its potential to disrupt private enterprise.
The government projects 4% GDP growth for 2025, significantly lower than 5.7% growth in 2024. Despite claiming an economic reset, the budget fails to reflect increased confidence in growth.
On debt, the government touts a reduction in the Debt-to-GDP ratio to 61.8% in 2024, but Hon. Osei-Asare points out that this is largely due to economic expansion, not just debt restructuring. Furthermore, import cover is set to decline from four months in 2024 to three months in 2025, raising concerns about external obligations.
The budget proposes GHS 10.4 billion for a financial sector bailout, despite the banking sector showing no clear signs of distress. This move, she warns, could undermine investor confidence by falsely signaling instability.
Meanwhile, interest payments have surged to GHS 64.1 billion, contradicting the expected savings from the external Debt Exchange Program, which was supposed to reduce Ghana’s debt burden.
The much-touted “Big Push” infrastructure plan projects $10 billion in spending, yet only $800 million is allocated in the first year. This suggests the initiative lacks proper funding. Additionally, key projects such as the Agenda 111 hospitals and Accra-Tema Motorway reconstruction have been sidelined despite previous commitments.
Rather than restoring confidence, the budget introduces uncertainty. The unjustified banking bailout and underwhelming GDP growth targets could discourage investment and economic optimism.
Hon. Osei-Asare’s analysis reveals stark contradictions in the 2025 Budget. With increased government spending, unclear revenue strategies, and misaligned economic policies, the budget risks exacerbating Ghana’s fiscal challenges instead of resolving them. The question remains: is this truly an economic reset, or a pathway to greater instability?
