Govt targets GH¢229.9bn revenue - Seeks GH¢2.9bn more

The Minister of Finance, Dr Cassiel Ato Forson, has presented a revised budget to Parliament, asking to be allowed to raise GH¢229.9 billion in revenue and grants, up from the GH¢227.1 billion target of March.

The minister said the additional revenue of GH¢2.9 billion was expected to come from the increase in revenues from the amended Energy Sector Levies Act (ESLA).

In the barely two-hour presentation of the 2025 Mid-Year Budget, Dr Forson stated that the total expenditure on commitment basis (including all anticipated liabilities) had been revised downwards to GH¢269.5 billion from the original budget projection of GH¢270.9 billion.  

The Finance Minister appeared on the floor of Parliament yesterday to deliver the 71-page summarised budget to table a motion that sought to revise both revenue and expenditure projections to reflect the impact of the additional revenue expected from the Energy Sector Levies (Amendment) Act, 2025 (Act 1141).

The revised budget also took into account some expenditure realignments, including the recapitalisation of the National Investment Bank, which had a capital injection of GH¢450 million, together with other measures to revive the ailing state-owned bank, the payment of arrears to various funds and the payment of nursing training allowances, among others.

The upward revision of total revenue and grants is now equivalent to 16.4 per cent of Gross Domestic Product (GDP), up from 16.2 per cent of GDP targeted in March.

This represents a nominal increase of 1.3 per cent.

This means that the minister did not have to request for a supplementary spending, with annual borrowing needs expected to reduce by 2.5 per cent.

Dr Forson said the overall fiscal balance was expected to show improvement, with the cash basis deficit narrowing from 4.1 per cent of GDP to 3.8 per cent, and the commitment basis deficit decreasing from 3.1 per cent to 2.8 per cent.

He added that those adjustments would also lead to a reduction in the government's annual borrowing needs by GH¢4.3 billion.

“Mr Speaker, notwithstanding the revisions to revenue and expenditures, the primary balance on commitment basis remains unchanged at a surplus of 1.5 per cent of GDP,” he said.

Macroeconomic targets

Dr Forson stated that given the economic developments in the first half of the year, the macroeconomic targets and appropriations for 2025 remained unchanged.

He said the key targets for 2025 included an overall real GDP growth of at least 4.0 per cent, non-oil real GDP growth of at least 4.8 per cent, an end-year inflation rate of 11.9 per cent, a primary balance on a commitment basis at a surplus of 1.5 per cent of GDP, and gross international reserves covering a minimum of three months of imports.

He said in spite of progress made so far, the government maintained a cautiously optimistic outlook.

The minister maintained that interest payments had been revised downwards by GH¢4.3 billion, from the original budget projection of GH¢64.1 billion to GH¢59.9 billion.  

He said domestic interest had been revised downward by GH¢5.1 billion mainly on account of gains from the reduction in the treasury bill rates, as a result of the implementation of prudent debt management policies.

However, he said external interest payments had been revised upward by GH¢795 million to make additional provision for debt service due on post cut-off date disbursements made by the country’s bilateral creditors since 2023.

“Mr Speaker, energy sector payments have also been revised upwards by GH¢2.9 billion to make provision for fuel purchases for power generation,” he added.

Risks to 2025 fiscal framework

Dr Forson said that in spite of the robust fiscal performance, there were underlying risks which posed a threat to the 2025 fiscal framework.

“These risks are: shortfall in customs revenue; the smuggling of marine gas oil; mounting wage pressures; and pricing and award of contracts in foreign currency.

“Mr Speaker, customs revenue recorded a significant shortfall of GH¢1.6 billion, representing 12.7 per cent, for the first half of 2025,” he said.  

He said this underperformance was attributable to systemic revenue leakages at key customs collection points, notably the Tema Port, and the smuggling of goods across our land borders.  

He added that these developments posed risks to the attainment of our revenue target for the year.

Solutions

To mitigate the risks, the minster stated that the government was implementing measures to address existing operational challenges to safeguard revenue.

Towards that, he said the government would adopt the use of Artificial Intelligence (AI) tools to minimise human interference in revenue assessment, supporting the validation of the country of origin, as well as the accuracy of classification and valuation of imported goods.

He said the government would also roll out advanced cargo information (ACI) system to ensure that the Ghana Ports and Harbours Authority (GPHA) and the Ghana Revenue Authority received comprehensive shipment details at least 24 hours prior to vessels departure from the port of origin.

“This will enable pre-arrival risk assessment, reduce the need for documentation amendments and facilitate more accurate and timely duty assessments; implement a robust anti-smuggling surveillance programmes targeting both inland and maritime borders.

“And review the institutional setup of the Customs Division of the Ghana Revenue Authority, including staff mobility, to facilitate the decentralisation of Customs operational risk to enhance transparency and accountability of staff,” he added.