The revenue and expenditure projections for Ghana in 2025, as revealed by IC Research, have sparked discussions about the nation’s fiscal direction and economic stability.
The IC Research estimates that, Ghana’s total revenue for 2025 will reach GHS 209.3 billion, approximately 17.2% of the gross domestic product (GDP).
Senior Finance Lecturer of the University of Cape Coast Dr. Seyram Kawor has examined the IC research projection. He reaffirmed;
“This revenue projection, which will slow down to 209 billion Ghana cedis, tells us that there is a lot that we need to look at. The incoming government trying to tell us that they are going to scrap some revenues in terms of taxes would mean that, what we expect to get in 2025 will be lower than what would have come in.’’
Dr. Seyram Kawor Senior Finance Lecturer (UCC)
According to him, this slowdown signals a critical need for strategic planning in revenue generation and tax administration. On the grounds of revenue mobilization, he stated;
“Government is going to reduce its spending, which will impact public service and infrastructure development in the country. We also going to look at some economic contractions that would come in. And here, we talking about government spending that would also go a long way to have us increased our debt when we are not actually getting revenue. That can lead to economic instability in the country.”
Dr. Seyram Kawor Senior Finance Lecturer (UCC)
He indicated that the anticipated drop in the expenditure-to-GDP ratio to 19.8%, amidst a flat revenue-to-GDP ratio of 17.2%, reflects a consolidation effort based on post-election year expenditure controls. He reiterated;
He pointed out earlier developments where the incoming government told Ghanaians its decision to go with a limited number of ministers. According to him, If that happens, it would increase revenue and that will bring additional cuts in government expenditure. He reitrated;
“It also implies that if we are not able to raise enough amount of revenue in the country, it means we have to go back to borrowing, and that might have implication for the IMF extended facility that we have.”
Dr. Seyram Kawor Senior Finance Lecturer (UCC)
However, the IMF has maintained that Ghana’s consolidation efforts should focus on revenue mobilization. This underscores the critical role of effective tax administration and efficient revenue collection.
Moreover, to address the challenges of slow revenue growth, Dr. Kawor advocated for improvements in tax administration.
According to him, the efficiency of tax administration must be improved to reduce evasion and increase collection. He argued that currently, third parties are collecting taxes rather than the Ghana Revenue Authority. He indicated that this needs to change. He added;
“The other way to look at it is to broaden the tax base, when we broaden the tax base, we are going to reduce the over-reliance on the few taxpayers that are already paying the taxes in the country. And how would government be able to increase the tax base? Through education, making sure that those who are not paying the taxes are brought on board through accountability and transparency.’’
Dr. Seyram Kawor Senior Finance Lecturer (UCC)
Despite the benefits, others pointed out that expanding the tax base poses challenges. Thus many citizens are either unwilling or unable to pay taxes due to a lack of trust in the government’s use of funds.
Eliminating Loopholes in the Tax System
Meanwhile, Corruption and inefficiencies in the tax system significantly reduce government revenue. Dr. Kawor highlighted the need to address these issues.
“The loopholes in the tax system are so much that government receives little of the taxes we pay.’’ He argued. He emphasized that closing these loopholes is critical and that government needs to employ people with integrity and remove party persons from managing revenue collection institutions.
On the grounds of fiscal discipline, he pointed out that the country cannot continue to spend more than what it receives, thus Government must align expenditure with revenue growth and ensure transparency and accountability in the use of public funds.
Ghana’s fiscal projections for 2025 present a mixed picture of cautious optimism and significant challenges.
While slower revenue growth and reduced expenditure signal a commitment to fiscal consolidation, achieving these targets will require strong political will, efficient tax administration, and enhanced fiscal discipline.
With revenue growth projected to slow and government expenditure set to decline significantly, experts are analyzing the implications for development, debt management, and public service delivery.
This represents a slower growth rate of 16.1%, compared to the significant 33.8% year-on-year growth estimated for 2024.
Moreover, on the expenditure side, IC Research noted that total expenditure on a commitment basis is projected at GHS 240.9 billion, approximately 19.8% of GDP.
This marks a sharper slowdown in expenditure growth to 10.4% year-on-year, compared to the 32.2% estimated for 2024.
According to the IC report, the expenditure forecast assumes full debt restructuring. Consequently, the IMF underscored the need to strengthen expenditure controls and implement an enhanced fiscal responsibility framework.
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