In anticipation of the 2025 national budget reading, the Ghanaian-German Economic Association (GGEA) hosted the Ghana Economic Outlook 2025 forum, bringing together policymakers, industry leaders, and economic experts.
With discussions centered on macroeconomic stability, trade, and investment, the event aimed to explore pathways for economic resilience in a post-election year.
Election years in Ghana have historically seen increased public spending, currency fluctuations, and cautious investment trends.
The forum acknowledged this pattern, highlighting the importance of fiscal discipline and policy consistency.
Hon. Seth Terkper, Presidential Advisor on the Economy, underscored the nation’s biggest hurdle: fiscal imbalance.
“The biggest challenge you have is the fiscal, no question about it. Revenue is flat, while expenditures are moving exponentially. The difference between revenue and expenditure is a deficit, and when you have a deficit, you borrow”
Hon. Seth Terkper, Presidential Advisor on the Economy
He stressed that Ghana’s past mistakes with debt management must not be repeated.
The country’s past reliance on external debt relief mechanisms, such as the Highly Indebted Poor Countries (HIPC) initiative, provided temporary relief, but failure to establish a sustainable debt strategy has led to recurring financial strains.
Terkper called for a rationalized tax regime to boost revenue while maintaining a balance that does not stifle private sector growth.
He warned that without proper fiscal reforms, Ghana would continue to struggle with high-interest rates and private sector “crowding-out” effects.
IMF’s Growth Outlook and the Role of Trade
The International Monetary Fund (IMF) projects Ghana’s economy to grow by 4.4% in 2025, with inflation averaging 11.5%.
The IMF’s third review of Ghana’s extended credit facility arrangement in December 2024 noted that while growth is recovering, inflation remains a concern.
One of Ghana’s key economic opportunities lies in its participation in the African Continental Free Trade Area (AfCFTA).
The agreement is expected to enhance Ghana’s export potential, attract foreign investment, and integrate the country more effectively into global value chains.
However, successful implementation requires strong policies in trade facilitation, industrialization, and investment infrastructure.
Private Sector Issues
Professor Godfred Bokpin, an economist and finance professor, emphasized the need to improve Ghana’s business environment, particularly in taxation and regulatory efficiency.
“The future of our economy is digital. We need to remove every roadblock to digital transformation. This will not only create more jobs but also improve tax collection”
Professor Godfred Bokpin, Economist and Finance Professor
He also pointed out the dangers of an inefficient public sector, linking it to increased costs for businesses.
“An inefficient public sector represents a cost to the private sector. Corruption raises business costs, which are passed on to consumers through higher prices. If we are serious about reducing inflation and improving the business climate, we must tackle corruption head-on”
Professor Godfred Bokpin, Economist and Finance Professor
Another major issue raised was Ghana’s struggling financial sector. Non-performing loans currently stand at around 21%, creating a weak banking sector incapable of supporting large-scale private sector growth.
Bokpin also suggested leveraging tier-two pension funds to provide patient capital for infrastructure development and business expansion.
Germany’s Commitment to Ghana’s Growth
H.E. Daniel Krull, the German Ambassador to Ghana, acknowledged the impact of global geopolitical events on Ghana’s economy.
“When Russia started the war in Ukraine, many Ghanaians thought it wouldn’t affect them. But it does, particularly now, with the US cutting aid and Germany diverting resources toward defense. This limits our ability to provide financial support in other sectors”
H.E. Daniel Krull, German Ambassador to Ghana
Despite these challenges, he expressed optimism about Germany’s ongoing economic collaboration with Ghana. He highlighted renewable energy and IT as key areas where German investment could help Ghana become a regional hub.
“We are seeing major German companies setting up IT centers of excellence in Ghana, serving global markets. The potential in energy and digital technology is vast, and Ghana can position itself as a leader if the right policies are in place”
H.E. Daniel Krull, German Ambassador to Ghana
Taxation and Economic Reforms
Kofi Frimpong-Kore, Partner and Head of Tax at KPMG, elaborated on Ghana’s long history of tax policy changes, emphasizing the need for consistency.
“We’ve gone through numerous tax reforms, from VAT adjustments to E-levy introductions and emissions levies. Some were effective, while others faced resistance. What businesses need most is a stable and predictable tax environment”
Kofi Frimpong-Kore, Partner and Head of Tax at KPMG
He also pointed out that some levies, such as the carbon emission levy, have not generated any revenue despite being in place and called for better implementation and monitoring of tax policies to ensure they achieve their intended objectives.
National Budget 2025
As Ghana prepares for the 2025 national budget reading today, Finance Minister Cassiel Ato Forson is expected to incorporate key recommendations particularly from the National Economic Dialogue (NED) 2025 forum.
Stakeholders anticipate measures to address revenue shortfalls, rationalize taxation, and create a more business-friendly environment.
Experts believe that with proper reforms, Ghana can stabilize its economy, enhance trade competitiveness, and attract greater foreign investment.
The discussions at the GGEA forum underscored the critical need for sustainable fiscal policies, private sector support, and a proactive approach to economic governance.
As Ghana navigates its post-election economy, decisions made in the coming months will determine the country’s long-term economic trajectory.
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