Budget 2025 tomorrow - Aims to address hope, aspirations of citizenry

The Minister of Finance, Dr Cassiel Ato Forson, will tomorrow present the government’s first budget to Parliament in which many of the initiatives meant to reduce the cost of living and doing business are expected to be announced.

It will mark a significant milestone in the new administration’s quest to reduce specific taxes, undertake widespread economic and social reforms and introduce initiatives that will stabilise the economy, generate revenue domestically and spur shared growth.

The 2025 budget and fiscal policy, which has already received Cabinet approval, aims to address the hopes and aspirations of Ghanaians, the Minister of Government Communications, Felix Kwakye Ofosu, told the media last Friday.

The upcoming budget is expected to provide a comprehensive assessment of the country's economic situation, with particular emphasis on what the current administration inherited from its predecessor.

The Daily Graphic expects President John Dramani Mahama's "120-day social contract" to feature prominently in the budget.

This social contract includes the abolition of several taxes introduced by the previous administration, such as the E-Levy, the COVID-19 levy, the 10 per cent levy on bet winnings, and the emissions levy, which the Mahama-led administration promised.

It is also expected to announce tax waivers at the ports of entry to make the cost of doing business at the ports lower in line with the promises of the government.

While the specifics of economic growth projections and deficit targets remain undisclosed, the administration has signalled that the budget would align with President Mahama's vision as outlined in his recent State of the Nation Address. 

Economic recovery

The budget presentation comes as the country continues to navigate recovery efforts while balancing debt sustainability concerns.

Ghana has been faced with one of its most severe economic challenges in decades, prompting the need to seek assistance from the International Monetary Fund (IMF) for the 17th time.

At the core of the country’s challenges has been low revenue mobilisation.

The budget, which is coming after a five-day technical staff visit from the IMF, is therefore expected to outline key revenue mobilisation strategies, with a particular focus on expanding the tax base while potentially introducing relief measures for vulnerable sectors as part of the government’s social protection agenda.

Debt management will also remain a central theme, as Ghana works to meet targets set under its IMF programme.

In that vein, the budget is likely to detail progress on the ongoing debt restructuring efforts and provide updates on negotiations with external creditors, which have been critical to the country's economic stabilisation strategy.

Infrastructure development and industrialisation initiatives are expected to receive significant attention, particularly projects aligned with the government's industrialisation agenda.

Investment in energy infrastructure, transportation networks, road maintenance and digital connectivity are to be highlighted as essential foundations for sustainable growth and economic diversification, the Daily Graphic has gathered.

Analysts also contend that the Finance Minister is expected to announce some social intervention programmes, with possible expansions to education funding, healthcare access and food security measures.

“These social spending priorities will, however, need to be carefully balanced against fiscal consolidation targets, presenting one of the most challenging aspects of the budget framework,” one of the analysts who did not want to be named, stated.

The agricultural sector is very likely to see increased allocations as part of efforts to enhance food security and reduce import dependency.

This comes in the wake of forecasts by the Ghana Meteorological Agency that “Prolonged dry spells are expected to hit many parts of the country at the start and end of this year’s rainy season, potentially leading to severe droughts that could disrupt agriculture, heighten the risk of bushfires and threaten water availability”.

According to the 2025 seasonal forecast by the Ghana Meteorological Agency (GMet), which covers the March-April-May  and April-May-June periods, the dry spell could last between eight and 16 days across various regions.

Consequently, the Ministry of Food and Agriculture has scheduled a meeting with the agency this week for data and advice on how to proceed.

Last year, a similar dry spell compelled the government to announce an GH¢8 billion package for affected areas and farmers.

Stakeholders suggest the budget could introduce new incentives for agricultural mechanisation, irrigation infrastructure and value chain development to boost productivity and create rural employment opportunities.

Inflation control strategies and exchange rate stability measures, which remain persistent concerns for businesses and consumers alike, are also expected to feature and one of the ways to surmount this is the support for agricultural productivity.

Input from stakeholders

In a departure from traditional budget preparation, Dr Forson has actively sought input from ordinary citizens, particularly those in the informal sector.

His recent visit to Makola Market in Accra allowed him to engage directly with market women, female porters (kayayei), and traders who shared concerns about the rising costs of doing business, high taxation and the negative impact of the cedi's instability on their livelihoods.

"It was a privilege to interact with these hardworking Ghanaians who break their backs daily to support our economy," Dr Forson said after his market visit.

The Finance Minister's outreach extends beyond face-to-face interactions to include digital platforms, as he hosted a live discussion on X Spaces, inviting citizens, especially the youth, to share their views and concerns ahead of the budget.

"This budget is about shaping a stronger future for all; let's talk about what matters most to you," he posted, emphasising the participatory nature of this budget formulation process.

Economic dialogue

The budget is also expected to entail a lot of input from the recent National Economic Dialogue which set the tone for the government’s reset agenda.

The national dialogue produced a comprehensive set of recommendations aimed at stabilising and transforming the country's economic landscape.

The detailed blueprint focused on macroeconomic stability, sustainable growth, private sector development, infrastructural enhancement and structural adjustments.

The recommendations which are expected to be part of the budget for a medium-term implementation include implementing major tax reforms to expand the tax net, specifically targeted at property taxes and revised Value Added Tax (VAT) rates.

The proposals call for addressing revenue leakages through compliance and adherence with the Public Financial Management Act, 2016 (Act 921) as well as reforming the fiscal responsibility legislation.

As the day approaches, expectations are rife for a budget that anticipates balancing fiscal discipline with inclusive growth priorities.