Government’s economic reset: An era of discipline, reform

The government has unveiled its comprehensive plan to reset the country's economy, with a focus on stability, debt sustainability, growth, and prosperity for all Ghanaians. 

In an exclusive interview with the Daily Graphic (See our front lead), Finance Minister Dr Cassiel Ato Forson, outlined the five pillars of the government's macroeconomic strategy, which are fiscal discipline and debt sustainability, a resilient and inclusive growth model, deep structural reforms, stronger social protection, and sound monetary and exchange rate policy.

The Minister described this year as an "era of discipline, reform, and delivery," building on the progress made in the macroeconomic and real sectors last year.

The cornerstone of the new measures is the comprehensive VAT reform package, which includes the abolition of the COVID-19 Health Recovery Levy and the end of the decoupling of the Ghana Education Trust Fund (GETFund) and the National Health Insurance Levy (NHIL) from the main VAT.

The standard VAT rate has been reduced from 21.9 per cent to a flat 20 per cent, and the VAT registration threshold has been dramatically raised from GH¢200,000 to GH¢750,000.

These reforms are expected to provide relief to businesses and households, particularly small enterprises, and stimulate economic growth.

The government has also scrapped VAT on mineral prospecting and extended the zero-rating on locally manufactured textiles to 2028. 

Dr  Forson emphasised that the government's fiscal policy is anchored on discipline, credibility and growth.

The government is committed to maintaining a primary surplus of at least 1.5 per cent of GDP, driven by an aggressive Medium-Term Revenue Strategy and digital systems to expand the tax base. 

The broader economic vision rests on the five strategic pillars, which include ensuring fiscal discipline and debt sustainability, building a resilient, private sector-led growth model, implementing deep structural reforms, strengthening social protection, and maintaining sound monetary and exchange rate policies.

A landmark institutional change for 2026 is the establishment of an independent Value for Money Office, which will act as the permanent guardian of public spending, certifying major projects, enforcing cost benchmarks, and demanding measurable results from all government ministries and assemblies.

The success of these reforms will depend on the collective efforts of all stakeholders, and the Daily Graphic urges all Ghanaians to support this bold initiative.

The comprehensive VAT reform package and the five-pillar macroeconomic strategy are not just policy initiatives, but a clarion call to action for all of us to work together towards a common goal – a prosperous Ghana.

The abolition of the COVID-19 Health Recovery Levy and the reduction of the standard VAT rate from 21.9 per cent to 20 per cent are welcome reliefs for businesses and households.

The increase in the VAT registration threshold from GH¢200,000 to GH¢750,000 is a game-changer for small enterprises, which are the backbone of our economy. 

These reforms will not only stimulate economic growth but also make our economy more competitive and attractive to investors.

However, these reforms are not just about numbers and statistics; they are about people – our mothers, fathers, brothers, and sisters who are struggling to make ends meet.

They are about creating opportunities for our youth to unleash their potential and contribute to national development.

They are about building a Ghana where everyone has access to quality education, health care, and economic opportunities.

The government's commitment to fiscal discipline and debt sustainability is commendable.

The establishment of the Value for Money Office is a bold step towards ensuring accountability and transparency in public spending.

We must support these efforts by paying our taxes and demanding accountability from our leaders.

As we embark on this journey, we must recognise that challenges are inevitable, but they also present opportunities for growth and innovation.

We must seize this moment to build a Ghana that is resilient, inclusive and prosperous.

Let us work together to make Ghana a shining example of economic success in the region.

The Daily Graphic urges all Ghanaians to join the government in this bold initiative.

Let us turn our challenges into opportunities and build a brighter future for ourselves and generations to come.

Ghana is rising, and with determination and collective effort, we can make it happen.