Ghana Finance Minister Presents 2025 Mid-Year Budget Review

Finance Minister Presents 2025 Mid-Year Budget Review: Key Highlights on Economic Recovery and Fiscal Adjustments

In a highly anticipated session in Ghana's Parliament, the Minister of Finance, Dr. Mohammed Amin Adam, delivered the 2025 Mid-Year Budget Review, providing a comprehensive update on the nation's economic performance, fiscal policies, and strategic adjustments amid ongoing global and domestic challenges. The live-streamed event, broadcast across various platforms, drew significant attention from policymakers, economists, business leaders, and the general public, as it outlined the government's roadmap for sustaining economic stability and fostering growth in the latter half of the year and beyond.

Dr. Adam began his address by acknowledging the resilience of the Ghanaian economy in the face of persistent headwinds, including inflationary pressures, currency fluctuations, and external shocks such as the lingering effects of the global supply chain disruptions and geopolitical tensions. He emphasized that the mid-year review was not merely a routine fiscal update but a critical tool for recalibrating policies to align with emerging realities. "Our economy has shown remarkable fortitude," the Minister stated, "and this review underscores our commitment to inclusive growth, job creation, and poverty reduction."

One of the central themes of the presentation was the assessment of macroeconomic indicators for the first half of 2025. According to the Minister, Ghana's Gross Domestic Product (GDP) growth has been robust, projected to reach 3.1% by the end of the year, up from an initial estimate of 2.8%. This upward revision is attributed to strong performances in the agriculture and services sectors, which have benefited from government interventions such as the Planting for Food and Jobs initiative and digital economy expansions. However, the industrial sector faced setbacks due to energy supply inconsistencies and high production costs, prompting calls for targeted investments in infrastructure.

Inflation emerged as a focal point, with the Minister reporting a downward trend. Headline inflation, which peaked at over 50% in recent years, has moderated to around 23% as of mid-2025, thanks to prudent monetary policies by the Bank of Ghana and fiscal discipline. Dr. Adam highlighted the role of the cedi's relative stability against major currencies, supported by improved foreign exchange reserves bolstered by remittances, cocoa exports, and inflows from international partners. Nonetheless, he cautioned that food inflation remains a concern, driven by seasonal factors and global commodity price volatility, and announced measures to enhance local food production through subsidies for smallholder farmers.

On the fiscal front, the review painted a picture of cautious optimism. Revenue mobilization exceeded targets, with total revenues and grants amounting to approximately GH¢80 billion in the first half of the year, representing a 15% increase over the same period in 2024. This performance was driven by enhanced tax administration, including digital platforms for tax filing and anti-smuggling initiatives at ports. The Minister praised the Ghana Revenue Authority's efforts in closing revenue leakages, which have contributed to a narrower fiscal deficit. The projected overall budget deficit for 2025 is now estimated at 5.5% of GDP, down from the original 6.2%, aligning with the government's medium-term fiscal framework under the IMF-supported program.

Expenditures were another key area of discussion. Dr. Adam detailed that total expenditures stood at GH¢95 billion, with significant allocations to social intervention programs like the Free Senior High School policy, the National Health Insurance Scheme, and the Livelihood Empowerment Against Poverty (LEAP) program. Capital expenditure, however, lagged behind expectations due to delays in project financing, prompting a reallocation of funds to priority infrastructure projects, including road networks in the northern regions and upgrades to the Tema-Mpakadan railway line. The Minister announced supplementary appropriations totaling GH¢3.5 billion to address these gaps, emphasizing that these funds would be sourced from non-debt creating revenues to avoid exacerbating the debt burden.

Debt sustainability was addressed head-on, with the Minister providing updates on Ghana's debt restructuring efforts. Following successful negotiations with bilateral creditors and progress in the Eurobond restructuring, the country's public debt-to-GDP ratio has stabilized at around 88%, a slight improvement from previous highs. Dr. Adam reiterated the government's commitment to the Debt Sustainability Analysis framework, assuring Parliament that no new non-concessional borrowing would be undertaken without rigorous scrutiny. He also highlighted the role of domestic debt instruments, such as treasury bills, in financing the budget while encouraging greater participation from local investors.

In terms of sectoral allocations and policy adjustments, the review included several forward-looking measures. The energy sector received a boost with announcements of investments in renewable energy projects, aiming to add 500 megawatts of solar power to the national grid by 2026. This is part of a broader strategy to reduce reliance on thermal power and mitigate the impact of fluctuating global oil prices. In agriculture, the Minister unveiled plans to expand irrigation facilities in the Volta and Upper East regions, targeting a 20% increase in rice production to curb imports and enhance food security.

Education and health sectors were not overlooked. Dr. Adam proposed an additional GH¢1.2 billion for capitation grants and school infrastructure, underscoring the government's dedication to quality education. In health, funds were earmarked for vaccine procurement and the expansion of community health centers, particularly in underserved rural areas. The Minister also touched on youth employment, announcing the extension of the National Youth Employment Program with a focus on digital skills training and entrepreneurship support, aiming to create over 100,000 jobs in the coming months.

Social protection measures were expanded to address vulnerabilities exacerbated by economic uncertainties. The review included provisions for increasing LEAP benefits by 10% and introducing a new cash transfer program for elderly citizens without pension coverage. Dr. Adam stressed the importance of these initiatives in reducing inequality and promoting social cohesion, aligning with the Sustainable Development Goals.

Looking ahead, the Minister outlined risks and mitigation strategies. He noted potential threats from global economic slowdowns, climate change impacts on agriculture, and domestic political uncertainties ahead of elections. To counter these, the government plans to strengthen fiscal buffers, enhance revenue diversification, and deepen partnerships with development institutions like the World Bank and African Development Bank.

The presentation was not without its moments of parliamentary engagement. Opposition members raised questions on the transparency of revenue figures and the effectiveness of debt management strategies, leading to spirited debates. The Minister responded by pledging greater accountability, including quarterly fiscal reports to Parliament.

In his concluding remarks, Dr. Adam called for national unity in implementing the budget's provisions. "This mid-year review is a testament to our collective resolve to build a prosperous Ghana," he said. "With discipline and innovation, we will overcome our challenges and achieve sustainable development."

The 2025 Mid-Year Budget Review sets the stage for the upcoming full budget presentation later in the year, providing a blueprint for economic management that balances growth with fiscal prudence. As Ghana navigates a complex global landscape, the government's strategies will be closely watched for their impact on everyday citizens and the broader economy. This event reinforces the administration's focus on recovery, resilience, and reform, offering hope for a brighter fiscal future.

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