The 2025 Budget Statement presents a strategic blueprint for Ghana’s economic recovery, addressing significant challenges such as high public debt and weaknesses in financial management. Key focus areas include realistic growth targets, crucial reforms in the energy and cocoa sectors, and the introduction of the Big Push Infrastructure Programme to promote sustainable growth. This budget aims to restore fiscal credibility while supporting vulnerable sectors and enhancing living standards.
The 2025 Budget Statement outlines a comprehensive plan targeting the economic recovery of Ghana, addressing challenges from the previous government, including high public debt, fiscal risks in crucial sectors like energy and cocoa, and public financial management inefficiencies. The government’s strategy is built on reforms designed to establish a sustainable and inclusive growth path.
The Budget acknowledges the difficult economic landscape, particularly the record public debt that peaked in 2022. Loss of access to international capital markets led to a necessary debt exchange program and assistance from the IMF. Ghana faces severe debt servicing obligations, including GHS150.3 billion in domestic debt and US$8.7 billion in external debt from 2025 to 2028. Measures to alleviate liquidity pressures include managing the sinking fund and restructuring existing debt obligations.
There are considerable fiscal risks in both the energy and cocoa sectors, which are vital to the Ghanaian economy. The energy sector has reported a legacy debt of approximately US$1.73 billion owed to Independent Power Producers (IPPs), along with a forecasted financing gap of GH¢35 billion. Concurrently, the cocoa sector has experienced a production decline of nearly 50% over the past three years due to various challenges, necessitating renegotiation of IPP contracts and improvements in revenue collection.
Recognizing the importance of realistic growth targets, the 2025 Budget sets a projected real GDP growth rate of 4.00% and non-oil GDP growth at 4.80%. This strategic adjustment acknowledges the structural issues within the economy and aims for sustainable growth amidst external economic pressures, in light of recent past conditions.
The Budget emphasizes the need for robust revenue mobilization through tax reforms, including streamlining value-added tax and revamping the Growth & Sustainability Levy from 1% to 3%. To improve fiscal discipline, several programs are being eliminated, yielding savings of over GH¢1.8 billion, while uncapped statutory funds will provide an additional GH¢20 billion for essential programs and infrastructure initiatives.
A pivotal initiative within the 2025 Budget is the Big Push Infrastructure Programme, aimed at enhancing national infrastructure. This program mirrors successful projects in other nations, targeting transportation, energy, and technology to alleviate regional disparities. The initiative embodies a commitment to sustainable growth, job creation, and improvement in living standards for Ghanaians, while strengthening agricultural modernization through programs like Agriculture for Economic Transformation (AETA).
In conclusion, the 2025 Budget serves as a strategic framework addressing Ghana’s critical economic challenges, aiming for responsible recovery and growth. By establishing conservative growth projections and focusing on fiscal discipline and infrastructure development, the government is positioning Ghana for a resilient economic future, highlighting the Big Push initiative as a transformative element. This budget intends to rejuvenate fiscal credibility and stimulate inclusive economic growth for all citizens.
The 2025 Budget represents a comprehensive strategy for Ghana’s economic reform, built on addressing inherited challenges with a realistic outlook. Emphasizing detailed fiscal discipline, revenue reforms, and infrastructure investments through the Big Push initiative, it lays a foundation for sustainable growth. Through measured growth projections and the commitment to support vulnerable sectors, this initiative not only aims for economic recovery but also strives to enhance the overall standard of living for the populace, heralding a robust future for Ghana’s economy.
Original Source: www.ghanaweb.com
