Finance Minister Dr. Cassiel Ato Baah Forson has presented Ghana’s 2025 Budget Statement and Economic Policy to Parliament, outlining key measures aimed at stabilizing and resetting the country’s struggling economy.
Dr. Forson acknowledged that the government inherited an economy in deep crisis as of December 31, 2024, with severe fiscal distress and mounting debt obligations.
He revealed that the government’s primary means of financing the budget remains Treasury bills, while Ghana faces a $2.5 billion debt service payment in 2027.
The Domestic Debt Exchange Programme (DDEP) was structured to make 2027 and 2028 peak years for debt repayments, yet no financial buffers were built by the previous administration to cushion the debt burden.
Currently, domestic debt service due within four years stands at GHS150.3 billion, with outstanding payments to contractors amounting to GHS67.5 billion.
Key Economic Measures
Dr. Forson emphasized the government’s commitment to fiscal discipline and debt restructuring, stating that GHS10.45 billion is required to address legacy issues in the financial sector. The administration plans to reduce public debt to sustainable levels by tailoring expenditures to align with fiscal policies while working to restore confidence in the economy.
To combat inflation, the government will implement new economic measures in collaboration with the Bank of Ghana. Additionally, Goldbod will be strengthened to enhance the accumulation of foreign exchange reserves to stabilize the cedi.
Energy Sector Challenges
The Finance Minister highlighted a significant financial shortfall in the energy sector, posing risks to the economy. In response, the government seeks amendments to the Petroleum Management Fund, the Energy Sector Levies Act, and the Ghana Education Trust Fund.
Declining Cocoa Production
Cocoa production has dropped by nearly 50% in recent years, negatively impacting the country’s financial standing. COCOBOD’s debt currently stands at GHS32 billion, further straining the economy.
Tax Reforms and Revenue Measures
As part of efforts to ease the tax burden on citizens and businesses, the government announced the abolishment of several taxes, including: Betting Tax, E-Levy, Emissions Levy and VAT on Motor Vehicle Insurance Policies.
However, the administration also proposes increasing the Growth and Sustainability Levy while reducing the tax refund ceiling from 6% to 4%. A VAT Reform Taskforce will be instituted to enhance tax compliance.
Infrastructure and Public Sector Reforms
The government plans to reintroduce road tolls this year and amend the Public Procurement Act to improve financial management. Additionally, certain development initiatives, such as 1D1F, GhanaCares, and Youth Start, will be eliminated.
Social and Educational Policies
Dr. Forson announced a significant education policy shift, stating, “I will implement Free Tertiary Education for Persons with Disabilities (PWDs).”
Despite the challenges, the Finance Minister assured Ghanaians that the government is determined to reset the economy, anchored on restoring hope and renewing trust. “We have stopped the bleeding; the reset has just begun,” he stated.
