The government, through the 2025 budget statement and economic policy is projecting to increase revenue to GH¢223.8 billion and expend GH¢269.1billion this year.
The government’s expected GH¢269.1 billion expenditure for 2025, which leaves a deficit of GH¢45.3 billion for the 2025 financial year is also higher than the programmed GH¢226.7 billion expenditure for 2024.
Presenting the budget to Parliament on Tuesday, March 11, Dr Cassiel Ato Baah Forson, Minister of Finance, said the government would explore both domestic and external sources to close the deficit gap.
The projected total revenue and grants of GH¢223.8 billion for 2025 (representing 17.2 per cent of Gross Domestic Product, GDP) is a 45.8 per cent increase from the GH¢153.5 billion recorded by the Ghana Revenue Authority in 2024.
“Foreign financing will include a provision for financing from IMF-ECF programme disbursements of $720 million and World Bank Development Policy Operation (DPO) funding of $600 million,” he said.
“The residual Net Domestic Financing will amount to GH¢36.9 billion (2.6% of GDP), representing 65.0 per cent of the total financing for 2025. This is expected to be sourced from the issuances of debt at the short end of the domestic market,” he added.
The Minister outlined some fiscal policy objectives to support the economic transformation and ensure macroeconomic stability, including rationalising government expenditure and eliminating wasteful expenditure.
The government has also planned to optimise domestic revenue mobilisation through the broadening of the tax base, increasing non-tax revenue collection, adopting enhanced tax compliance measures, and modernisation of tax administration through digital technology.
Increasing the share of domestic capital expenditure to spur economic growth and job creation, reducing public debt to sustainable levels and adopting prudent debt management practices to support debt sustainability, were also part of the fiscal policy measures.
Again, the government has planned to reduce the fiscal deficit progressively in accordance with an amended Fiscal Responsibility Act to promote fiscal and debt sustainability and restore confidence in Ghana’s economy.
At a post-budget press conference on Thursday, March 13, Dr Mohammed Amin Adam, former Finance Minister, and a Ranking Member of Parliament’s Finance Committee, raised concerns about the budget.
He said the economy inherited by the John Mahama government was one with a strong revenue performance and expenditure controls and could not produce elevated fiscal outturns.
He stated that the fiscal deficit on commitment basis of 7.6 per cent of Gross Domestic Product (GDP) and primary deficit of 3.6 per cent of GDP, presented by the Minister of Finance, for example, was inaccurate.
Dr Amin Adam cautioned the government about financial reporting, which has the potential to derail the country’s sustainability efforts, and any subsequent sanctions by the international financial institutions.
“The Ghanaian people can recall that in the past, Ghana was fined $39 million for misreporting economic data to the IMF due to wrong data submitted by the NDC government led by former President Rawlings,” he said.
“We wish to advise the Minister for Finance to tread cautiously in order not to derail our march to sustainable debt levels… the 2025 budget must be re-examined with full transparency to ensure that our fiscal policies are credible and sustainable,” he said.
Source: GNA