On March 11, 2025, Finance Minister Dr. Cassiel Ato Forson presented the Ghana 2025 Budget Statement and Economic Policy to Parliament on behalf of President John Dramani Mahama.
The budget themed “Resetting the Economy for the Ghana We Want,” is the first under the new administration and aims to tackle Ghana’s economic crisis, introduce job creation policies, and restore fiscal discipline. Below is a detailed breakdown of all the key policies, economic projections, and government initiatives outlined in the Ghana 2025 Budget.
The Economic State of Ghana in 2024
Dr. Forson painted a grim picture of the economy inherited by the new government, describing it as being in deep crisis due to excessive debt, inflation, and fiscal mismanagement.
- Ghana’s public debt reached GH₵726.7 billion by the end of 2024.
- Inflation rose from 23.2% in 2023 to 23.8% in 2024, exceeding the budget target of 15%.
- The government inherited GH₵67.5 billion in unpaid arrears, including US$1.73 billion owed to Independent Power Producers.
- The Cedi depreciated by 19.2% against the US dollar and 17.8% against the British pound in 2024.
- The IMF-supported program remains off track, with key fiscal targets missed.
Key Economic Reforms and Fiscal Policies in the Ghana 2025 Budget
1. Reducing Government Spending & Fiscal Responsibility
To restore fiscal discipline, the government has pledged to cut down excessive spending:
- Reduction in the number of government ministries from 30 to 23.
- Ministerial appointments cut from 88 to 60.
- Strict enforcement of financial management laws to curb wasteful expenditures.
- Procurement processes to be reformed to prevent overspending and corruption.
- Multi-year contracts will now require parliamentary approval before execution.
2. Addressing Ghana’s Debt Crisis
The budget outlines measures to tackle Ghana’s unsustainable debt:
- Smoothening the 2027 and 2028 debt repayment “humps” to avoid economic shocks.
- Reopening the domestic bond market cautiously to extend the maturity profile of debt.
- Implementing liability management strategies to reduce high-interest payments.
- Building cash buffers to cushion the economy against external shocks.
Tax Policy Reforms in the Ghana 2025 Budget
3. Removal of “Nuisance Taxes”
In line with the government’s promise to ease the tax burden on citizens, the following taxes have been abolished:
- E-Levy (1%)
- 10% Betting Tax
- VAT on motor vehicle insurance
- Emission Levy on vehicles and industries
- 1.5% withholding tax on unprocessed gold purchases
To make up for lost revenue, the government will improve tax compliance, cut wasteful spending, and increase revenue from the extractive sector.
4. Revenue Mobilization and VAT Reforms
- Increase in the Growth & Sustainability Levy on mining companies from 1% to 3% to reflect rising gold prices.
- The Special Import Levy will be extended to 2028.
- Reintroduction of road tolls using a technology-driven system to fund infrastructure projects.
- Comprehensive VAT reforms are planned, including:
- Abolishing the COVID-19 Levy.
- Reversing the decoupling of GETFund & NHIL from VAT.
- Reviewing the VAT Flat Rate Scheme.
Job Creation and Social Protection Initiatives in the Ghana 2025 Budget
5. 24-Hour Economy Policy
A new framework to encourage businesses to operate 24/7 in three shifts, boosting production and employment. To support this:
- The Labour Act and Ghana Investment Promotion Centre (GIPC) Act will be reviewed.
- Special incentives will be introduced to encourage businesses to operate beyond normal working hours.
6. No-Academic-Fee Initiative & Free Tertiary Education for PWDs
- First-year students in public tertiary institutions will have their academic fees waived.
- Free tertiary education will be provided for Persons with Disabilities (PWDs).
7. Free Primary Healthcare & MahamaCares
- All Ghanaians will benefit from Free Primary Healthcare.
- MahamaCares program will cover treatment for non-communicable diseases.
8. The “Big Push” for Infrastructure Development
- GH₵13.85 billion allocated for major infrastructure projects.
- Reintroduction of road tolls to generate funds for road maintenance.
- A new Ghana Gold Board (GOLDBOD) will be established to regulate and manage the country’s gold reserves.
9. Social Interventions for Vulnerable Groups
- GH₵292.4 million allocated for free sanitary pads to support schoolgirls.
- GH₵1.788 billion allocated for the School Feeding Program, increasing the meal cost per child from GH₵1.50 to GH₵2.00.
- LEAP support expanded to 400,000 households, with a 30.8% increase in benefits.
- Uncapping of the Road Fund, GETFund, and NHIS Levy to ensure full funding of free secondary education and healthcare.
The Ghana 2025 Budget presents an ambitious plan for economic recovery, job creation, and social protection. However, its success depends on effective implementation, strict fiscal discipline, and political support.
Key Questions Moving Forward:
- Can the government effectively stabilize the economy while increasing social spending?
- Will the abolition of taxes lead to economic relief or revenue shortfalls?
- How soon will Ghanaians feel the impact of these policies?
Find the full budget below
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Story by: Cindy Selasi Humade |www.univers.ug.ed.gh
