Dr Cassiel Ato Forson
As the dust settles on the 2025 national budget, citizens and policymakers alike are faced with the challenge of deciphering what these figures mean for Ghana’s future. The budget introduces a range of new policies aimed at economic recovery, revenue mobilisation, and social intervention. While some of these policies offer promises of relief, others have raised concerns regarding their feasibility and the potential impact on the average Ghanaian.
Every year, the government’s budgetary decisions influence everything from the cost of living to the nation’s long-term economic health. In 2025, the debate in Parliament has been particularly intense as members grapple with how to balance fiscal responsibility with the pressing needs of the population.
Government Expenditure
The new budget sets total national spending at GH¢290.97 billion, against a projected revenue mobilisation and grants figure of GH¢223.8 billion. This revenue figure represents 17.2 percent of the country’s Gross Domestic Product (GDP), an increase from last year’s GH¢186.5 billion, which accounted for 17.4 percent of GDP. However, these projections result in a cash shortfall of GH¢56.9 billion.
According to Finance Minister, Dr. Cassiel Ato Forson, this gap will be addressed through cost-cutting measures and the issuance of treasury bills amounting to GH¢36.9 billion, alongside foreign financing of GH¢21.4 billion derived from disbursements under the International Monetary Fund (IMF) programme and World Bank Development Policy Operation funding.
A significant portion of the budget is dedicated to major capital projects such as road construction, housing, and energy infrastructure. Although the previous year’s commitments for Ministries, Departments, and Agencies (MDAs) reached around GH¢194 billion, the allocations for 2025 are expected to continue driving improvements in transport and public works. In the social sector, the government has shown support for education through initiatives like Free Senior High School (Free SHS) and various educational reforms. Despite initial estimates indicating a need of GH¢1.3 billion for these programmes, the final allocation has been closer to GH¢800 million, which has raised concerns regarding the full implementation of these initiatives. In healthcare, the Agenda 111 project—designed to build 111 district hospitals—has been allocated funding between $1.4 billion and $1.7 billion. Discrepancies in these funding figures have led to calls for clearer budgeting to ensure improved access to healthcare, particularly in rural areas, even as critics question whether these allocations will translate into tangible improvements or if delays and mismanagement might lead to cost overruns.
The budget’s expenditures are broadly categorised across major sectors, with detailed breakdowns provided in the appendices. The Administration sector includes allocations intended to enhance public sector management and improve the efficiency of government operations and public financial management. In the Economic sector, the focus is on agriculture, industry, and services. Investments in agriculture aim to boost crop production and livestock development, although reduced funding for cocoa—a key export—raises concerns about the sustainability of production in this area.
In the Industry sector, funds are allocated to support mining, manufacturing, and construction, even though a decline in oil and gas production is projected, potentially impacting overall revenue. The Services sector, which remains the largest contributor to GDP, receives funding intended to enhance trade, information and communication, financial services, education, and healthcare.
Regarding revenue and fiscal policy, the budget builds on previous fiscal outturns and emphasises a strategy to boost domestic revenue to reduce reliance on external borrowing. The government has set an ambitious target to increase tax revenue to approximately GH¢200 billion in 2025, a significant rise from the GH¢152.9 billion recorded in 2024. This goal is to be achieved partly by removing certain levies, such as the Electronic Transactions Levy (E-Levy), and introducing new revenue measures. However, critics warn that while the removal of the E-Levy is expected to ease financial transactions, new taxes on sectors such as mining, telecommunications, financial services, and real estate could ultimately shift the burden onto consumers.
Debt Management
Debt management is another critical focus of the budget, with around GH¢46.7 billion allocated for interest payments. Detailed schedules for domestic and external debt service obligations indicate that heavy repayment burdens are expected in 2027 and 2028. Although the government aims to reduce the overall debt-to-GDP ratio from 78 percent to around 72 percent, upcoming obligations remain a significant fiscal concern. The budget also outlines measures to renegotiate debt terms, including domestic debt exchange programmes, yet there are warnings that current financing arrangements, especially those related to Treasury bill rollovers, could strain cash flow.
In the energy sector, despite substantial spending in 2024—amounting to approximately US$1.5 billion or GH¢20.8 billion for addressing legacy issues—the forecast for 2025 indicates a Business-as-Usual shortfall of over US$2.2 billion. This shortfall is attributed to various inefficiencies, including collection shortfalls, high system losses, and tariffs that do not reflect actual costs. Additionally, significant unpaid obligations to Independent Power Producers (IPPs) and other energy sector arrears continue to pose fiscal risks.
The budget introduces the 24-Hour Economy policy as a key initiative aimed at stimulating continuous economic activity and job creation, with the associated funding intended to catalyze growth in both urban and rural areas.
Sector-specific reforms also play a central role in the budget, with proposed legislative reviews and amendments targeting areas such as Petroleum Revenue Management, Energy Sector Levies, and Public Procurement. These reforms are intended to streamline revenue collection and expenditure, improve service delivery, and ensure greater fiscal discipline.
In conclusion, the 2025 Budget presents a blend of ambitious policies and potential challenges. While the government positions the budget as a decisive step toward economic recovery and fiscal stability, critics argue that inconsistencies in allocations, revenue-generation strategies, and debt management may undermine its effectiveness. As Parliament continues to debate and potentially amend the proposed measures, the coming months will reveal whether these policies provide a viable pathway to economic transformation or exacerbate the nation’s fiscal challenges. Ghanaians will be closely watching to see how the government balances economic growth with social responsibility in the years ahead.
By Ernest Kofi Adu, Parliamentary Correspondent