Dr. Cassiel Ato Forson
The Minister of Finance, Dr. Cassiel Ato Forson, has revealed that the financial sector requires GH¢10.45 billion to address the remaining financial legacy issues and risks caused largely by the financial sector clean-up.
The Minister who disclosed this when he presented the 2025 budget statement and economic policy in Parliament said the financial sector is still struggling after spending GH¢30.3bn in the financial sector clean-up exercise.
He said it includes, “GH¢26.9 billion spending for the banks, Savings & Loans companies, financial houses, micro-finance institutions, and asset management companies while an amount of GH¢2.2 billion is required to fully capitalize NIB and ADB”
Touching on fiscal performance for the 2024 financial year, the Minister stated that the fiscal performance in 2024 was characterized by improved revenue collection but with significant expenditure overruns.
According to him, provisional data showed that the primary balance on commitment basis, which is the key fiscal anchor, worsened from a deficit of 0.2% of GDP at the end of 2023 to a deficit of 3.9% of GDP at the end of 2024 recording 4.4 percentage points worse than the target surplus of 0.5% of GDP.
“On cash basis, the primary balance was a deficit of 1.2% of GDP against a target deficit of 0.6% the overall fiscal balance on commitment basis for 2024 was a deficit of 7.9% of GDP against a target deficit of 4.2% whilst the overall fiscal balance on cash basis was a deficit of 5.2% of GDP against a target of 5.3%”.
“Primary Expenditure on commitment basis, including discrepancy amounted to GH¢232.4 billion or 19.8% of GDP. This is 35.3% above the target of GH¢171.7 billion or 16.8% of GDP,” he emphasized.
He further explained that all expenditure lines exceeded their respective targets for the period except for interest payments, goods and services and other expenditure.
By Ebenezer K. Amponsah