The budget to reset Ghana

Last Tuesday, the government pre­sented the nation’s budget statement for the 2025 fiscal year, through the Minister for Finance, Dr Cassiel Ato For­son, to the people of Ghana at the assembly of the representatives of the people at the Parliament.

Per Article 179 of the 1992 Constitution and Section 21 (3) of the Public Financial Management Act, 2016 (Act 921), the Minister for Finance, is mandated on behalf of the President, to lay before Par­liament the ensuing year’s Budget Statement and Economic Policy of Government.

The presentation primarily focused on delivering manifes­to outlines in expanding on the economy’s recovery from what the minister described as an economy of crisis and creating a climate-friendly entrepreneurial state to address unemployment and import substitution.

Ghana faces many challenges that the government has prom­ised to address, that is to say, reset. These include economic issues, corruption, environmental concerns, and social issues among others.

Economic challenges include unemployment, especially among young people, a galloping inflation rate, slowing economic growth, lack of or limited access to credit, and insufficient infrastructure development.

There are also challenges within the social sector concerning high poverty levels, income inequality, inadequate healthcare system, disparities in the educational arena and gender inequality.

The 2025 budget statement seeks to address some of the key challenges facing Ghanaians. For instance, the economic recovery and fiscal responsibility aspect of the budget is resounding. The budget emphasises a roadmap to economic recovery, focusing on fis­cal prudence to restore macroeco­nomic stability and boost investor confidence. This approach aims to balance necessary fiscal tightening with sustainable growth strategies.

Ghana’s debt management continues to be a burden, Accord­ing to the Minister, “Over the next four years, the country is expected to pay about GH¢150.3 billion, representing 11.6 per cent of GDP in domestic debt service obligation alone, of which 73.3 per cent due in 2027 (GH¢57.6 billion) and 2028 (GH¢52.5 billion). “

The external debt service obli­gations is also in the tune of $8.7 billion over the next four years, with peaks of $2.5 billion in 2027 and $2.4 billion in 2028. The bud­get acknowledges these challenges and outlines measures to manage and mitigate the debt burden effectively.

Ghana’s debt situation requires urgent and strategic action. By combining strong diplomacy, economic reforms, and interna­tional engagement, Ghana can successfully negotiate debt relief and create a path toward long-term economic stability.

The country’s huge external debt remains a significant challenge, af­fecting economic growth, currency stability, and social development. To address this issue, the country can consider a combination of short-term relief measures and long-term structural reforms. Here are some key strategies:

Can more pragmatic measures and deeper engagement for relief with international lenders such as the International Monetary Fund (IMF), World Bank, China, and other private bondholders restruc­ture the debt, extend repayment periods, or negotiate lower interest rates? For how long can we contin­ue to have these frightening debt figures in our book?

Since 1992, all budgets have sought to address the issue of Tax Reforms. As noted earlier, much has not been achieved in this direc­tion. In a move to reduce the tax burden on citizens and stimulate economic activity, the government has abolished the one per cent COVID-19 Health Recovery Levy. This decision addresses public concerns about the levy and aims to enhance disposable income for Ghanaians.

Symbolically, the budget was presented in a Made-in-Ghana leather briefcase designed by local artisan Tonyi Senaya of Horseman. This gesture underscores the gov­ernment’s commitment to promot­ing local industries and self-reli­ance, aligning with the ‘Buy Ghana, Wear Ghana’ agenda. This is good news to the ordinary Ghanaian if pragmatic measures would hub the implementation.

Decentralisation of the econ­omy, skills development and entrepreneurship also featured prominently. The provision of allowances to Assemblymembers, as well as the 80 per cent of the District Assembly’s Common Fund going directly to the assemblies, sounds great. This is to provide direct access to funding for local developmental programmes.

Some key national economic issues such as the expansion of the tax net which has been the bane of the nation were also addressed. This statement has been in almost all budgets that have been read since the inception of the four republics. The implementation of this has been extremely difficult for all successive governments, if not impossible.

The minister also announced the intention of the Government to reintroduce tolls on all public roads in the country, which was abolished some three years ago by the previous government. Ghana’s annual road toll revenue was about 72 million Ghana Cedis (GH¢) before the 2022 budget abolished the toll.

The 70-page budget statement also recognises the need for job creation and worth creation. Restoring hope in the nation’s de­mocracy, renewing trust in public officials, and helping every Ghana­ian attain their full potential;

According to the minister, the government is to offer a trusted hand to the vulnerable, particularly women and youth, and create a new Ghana for coming genera­tions by stimulating demand by patronising made-in-Ghana goods under the 24-hour Economy Policy.

The much-anticipated issue in the statement was the funding of the Free Senior High School. For the NDC government, the overarching concern about free secondary education has been its quality and the absence of a dedicated source of funding. Ac­cording to the minister, the Ghana Education Trust Fund (GETFund) will be used for the full funding of the Free Senior High School education. For a start, the budget for the free secondary education programme is GH¢3.5 billion.

According to the World Bank collection of development indi­cators, graduates from tertiary education in Ghana were reported at 109,874 in 2018. Not more than three percent of these were absorbed into the formal sector.

The almighty 24-Hour Economy which is aimed at stimulating eco­nomic growth by creating an en­abling environment for businesses and institutions to operate 24/7 in three shifts of eight hours each to boost production, promote pro­ductivity, and generate well-paying jobs, could be a national economic reset tool and must be embraced by all.

The roll-out implementation of the government’s $10 billion “Big Push” policy for strategic infra­structural development to open up the country and drive sustainable economic growth and transforma­tion under the 24-Hour Economy policy is another fascinating drive.

Employment creation is one area in which successive governments have woefully failed to achieve any form of success. According to the Census and Economic Infor­mation Center (CEIC), Ghana`s Unemployment Rate is within an average rate of 5.73 per cent. It increased to 4.53 per cent in Dec 2024, from the previously report­ed figure of 4.12 per cent in Dec 2023.

The opposition New Patriotic Party (NPP) disagrees vehemently with the statement. For them, there is no need for the establishment of a brick-and-mortar bank for wom­en. The opposition believes that the amount devoted as seed money of 51.3 million Ghana Cedis for the bank is ridiculous against the backdrop of the women popula­tion in the country and their needs.

The opposition also disagrees with the government that the economy inherited was in crisis, citing debt levels, growth rate percentage and reserve of import cover as stronger than what the NDC is portraying the Ghanaian populace. They claimed that the 8.9 billion Dollars of reserved import cover for four months was better than what the NDC left for then in 2016

The opposition also lamented over the minister’s silence about the cost of leaving, including energy and water bills and also questioned why the NDC gov­ernment has introduced VAT on insurance.

In the words of the Finance Minister, “The budget is not just about numbers, it is a blue­print for growth, stability, and opportunity.” So, should it not be rhetoric but one that would restore faith in our economy, fos­ter innovation, and uplift every Ghanaian?

By and large, it is an approach befitting an agenda of resetting the country. For now, it remains a document. Let us all help to make it a reality.

BY NANA SIFA TWUM (PHD)