The Minister of Finance, Hon. Dr. Cassiel Ato Forson, has presented the 2025 budget to the 9th Parliament, outlining a comprehensive plan to stabilize the economy, control inflation, and support local businesses.
Acknowledging Ghana’s economic difficulties, the minister emphasized that the budget was shaped by the concerns of ordinary Ghanaians, particularly “traders and businesses” struggling with price instability and currency depreciation.
He assured that while the economic situation remains challenging, the government is committed to taking decisive action. “It is what it is. The state of our economy is troubling, but we will fix it,” he stated, stressing the need for sacrifice and discipline at all levels.
One of the most significant steps taken by the government, according to the minister, is the downsizing of its administration.
President John Dramani Mahama has reduced the number of ministers from eighty-eight to sixty and streamlined government ministries from thirty to twenty-three. The minister praised this move as a demonstration of the government’s commitment to responsible governance.
The budget also reflects an agreement between the government and organized labor to implement a modest increase in base pay and minimum wage for 2025. He commended Ghanaian workers for their cooperation and urged Parliament and the judiciary to also make sacrifices in response to the economic crisis.
“We must reset our nation to restore good governance, reduce the excruciating suffering of our people, and set our country on a trajectory of economic transformation”
Hon. Dr. Cassiel Ato Forson, Minister of Finance
Fiscal Policies and Exchange Rate Stability
One key concern highlighted in the budget is the volatility of the exchange rate, which has severely affected businesses.
Traders across major markets, including Makola Market, expressed frustration over how currency fluctuations have eroded their working capital and made “business planning difficult.”
To address this, the Minister outlined measures to stabilize the cedi, including closer collaboration with the Bank of Ghana to manage inflation and foreign exchange reserves.
One notable initiative is the establishment of the “Ghana Gold Board (GOLDBOD), which will oversee the purchase, refining, and sale of gold” to boost the country’s foreign reserves.
The finance minister also announced that the government would focus on reducing excessive public spending to control inflation.
“Ghanaians have expressed a clear desire for the fiscal deficit and public debt to be reduced through cuts in government spending rather than through only tax measures. We wholeheartedly agree”
Hon. Dr. Cassiel Ato Forson, Minister of Finance
Tax Reforms and Support for Businesses
One of the most anticipated areas of reform is the restructuring of the Value Added Tax (VAT) system. Ghana’s current VAT regime has been criticized for being too high and complex, imposing a heavy burden on businesses and consumers.
The government has promised to undertake a comprehensive review with the support of the International Monetary Fund (IMF) to simplify the system.
Among the key changes expected are the “abolition of the COVID-19 levy and the reversal of the decoupling of GETFund and NHIL from VAT,” both of which have contributed to the high effective tax rate.
The government also plans to increase the VAT registration threshold, to exempt small businesses from VAT collection.
“Our VAT regime has been distorted and rendered inefficient but we are determined to fix it,” the minister stated, adding that a VAT Reform Task Force would be set up to engage stakeholders and gather input on the reforms.
Interest Rate Cuts and Investment Confidence
The budget presentation also highlighted a significant reduction in treasury bill rates within the first two months of the Mahama administration.
According to the finance minister, the 91-day treasury bill rate dropped from 28.19 percent in January to 17.72 percent in March. The 182-day and 364-day rates also saw similar declines.
“This represents a reduction of over 1,000 basis points on average, signifying strong investor confidence and a positive shift in Ghana’s economic outlook”
Hon. Dr. Cassiel Ato Forson, Minister of Finance
He argued that these improvements would help reduce borrowing costs for businesses and create a more stable financial environment.
24-Hour Economy and Economic Growth
A major policy initiative is the 24-Hour Economy Policy, which aims to “stimulate economic growth” by encouraging businesses to operate around the clock.
The government plans to create an enabling environment for businesses to function in three shifts of eight hours each, boosting productivity and job creation.
To support this policy, the government will roll out the $10 billion “Big Push” infrastructure program, aimed at developing roads, railways, and other critical infrastructure to drive economic transformation.
“This initiative will not only create jobs but also position Ghana as a competitive industrial hub in Africa.”
The government is also prioritizing support for local industries through its Made-in-Ghana agenda.
State procurement policies will be adjusted to encourage the purchase of locally produced goods, reducing reliance on imports and, “strengthening domestic industries.”
In addition, the finance minister emphasized the government’s commitment to social protection, announcing plans to introduce new social intervention programs to alleviate economic hardships, particularly for women and youth.
“The government is offering a trusted hand to the vulnerable and creating opportunities for coming generations.”
As Ghana embarks on this economic recovery journey, the finance minister called on all stakeholders, businesses, civil society, investors, and the general public, to support the bold reforms outlined in the budget.
“This is not just a government effort; it is a national effort. Together, we can rebuild our economy, restore investor confidence, and create a prosperous future for all”
Hon. Dr. Cassiel Ato Forson, Minister of Finance
The 2025 budget, while ambitious, reflects a government determined to make difficult decisions to stabilize the economy, support businesses, and improve the livelihoods of Ghanaians.
Whether these measures will yield the expected results will depend on disciplined implementation and collective national effort.
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