N※N

Ghana's 2025 Mid-Year Budget Review: Key Highlights

  //politics-government.news-articles.net/content/ .. -2025-mid-year-budget-review-key-highlights.html
  Published in Politics and Government on Saturday, August 2nd 2025 at 20:46 GMT by Ghanaweb.com
          ^{🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source}

Extensive Summary of the 2025 Mid-Year Budget Review Presentation by Ghana's Minister of Finance

In a highly anticipated session streamed live from 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 strategies, and policy adjustments amid ongoing global and domestic challenges. The presentation, held in the hallowed chambers of Parliament, drew attendance from key stakeholders including Members of Parliament (MPs), government officials, economic analysts, and representatives from various sectors. This mid-year review serves as a critical midpoint assessment of the 2025 fiscal year budget, originally presented late last year, allowing for necessary revisions based on evolving economic realities.

Dr. Adam began his address by acknowledging the resilience of the Ghanaian economy in the face of persistent headwinds. He highlighted the global context, noting that uncertainties stemming from geopolitical tensions, inflationary pressures, and supply chain disruptions have impacted emerging markets like Ghana. Domestically, the minister pointed to the lingering effects of the COVID-19 pandemic, climate change-induced agricultural setbacks, and energy sector volatilities as key challenges. Despite these, he expressed optimism, stating that Ghana's economy has shown signs of stabilization and growth, underpinned by prudent fiscal management and strategic reforms.

A significant portion of the review focused on macroeconomic performance indicators. The minister reported that Ghana's Gross Domestic Product (GDP) growth for the first half of 2025 is projected at 3.1%, a slight upward revision from the initial budget estimate of 2.9%. This growth is attributed to robust performances in the services and industrial sectors, which have offset slower-than-expected expansion in agriculture. Inflation, a major concern for households and businesses, has been on a downward trajectory, with the average rate standing at 22.5% as of June 2025, down from 25.8% at the end of 2024. Dr. Adam credited this to effective monetary policies by the Bank of Ghana, including interest rate adjustments and foreign exchange interventions. He also noted that the cedi has stabilized against major currencies, with depreciation limited to 5.2% year-to-date, thanks to improved forex inflows from remittances, cocoa exports, and multilateral support.

On the fiscal front, the minister provided detailed updates on revenue and expenditure. Total revenue mobilization for the first six months reached GH¢78.4 billion, representing 52% of the annual target. This figure includes tax revenues of GH¢62.1 billion, non-tax revenues of GH¢10.2 billion, and grants amounting to GH¢6.1 billion. Dr. Adam emphasized the role of digitalization in enhancing tax collection, particularly through the Ghana Revenue Authority's (GRA) e-levy and value-added tax (VAT) reforms, which have plugged leakages and broadened the tax base. However, he candidly admitted shortfalls in some areas, such as petroleum levies, due to fluctuating global oil prices.

Expenditure-wise, the government has disbursed GH¢85.6 billion in the first half, aligning closely with budgeted allocations. Key spending areas include compensation of employees (GH¢28.3 billion), goods and services (GH¢15.4 billion), and interest payments on debt (GH¢22.1 billion). The minister highlighted efforts to control recurrent expenditure while prioritizing capital investments in infrastructure. Notably, the fiscal deficit is projected at 5.5% of GDP for the year, down from the initial 6.2% estimate, reflecting improved fiscal discipline. This has been achieved through expenditure rationalization and debt restructuring under the IMF-supported program.

Dr. Adam delved into sector-specific highlights, starting with agriculture, which remains the backbone of Ghana's economy. He announced additional funding of GH¢1.2 billion for the Planting for Food and Jobs (PFJ) initiative, aimed at boosting food security and reducing import dependency. In response to recent droughts affecting northern regions, the government plans to invest in irrigation infrastructure and climate-resilient crop varieties. The energy sector received commendation for progress in resolving power outages, with the minister revealing that installed capacity has increased by 15% through new solar and thermal plants. However, he acknowledged ongoing challenges with legacy debts in the sector, pledging to clear arrears amounting to GH¢3.5 billion by year-end.

Education and health sectors were also spotlighted as priorities. The Free Senior High School (SHS) program continues to be a flagship initiative, with GH¢4.8 billion allocated in the first half for infrastructure upgrades and teacher training. In health, the minister reported advancements in the National Health Insurance Scheme (NHIS), including expanded coverage for non-communicable diseases and mental health services. Amid global health threats, an additional GH¢500 million has been earmarked for vaccine procurement and pandemic preparedness.

Infrastructure development formed a core part of the review, with Dr. Adam outlining progress on major projects. The Agenda 111 hospitals initiative is on track, with 45 facilities nearing completion, expected to enhance healthcare access in underserved areas. Road construction has seen GH¢2.7 billion invested, focusing on the Eastern Corridor and urban mobility projects in Accra and Kumasi. The minister also touched on digital economy initiatives, such as the expansion of the Ghana Card system and fintech innovations, which are projected to contribute 1.5% to GDP growth.

Addressing debt sustainability, a pressing issue for Ghana, the minister provided reassuring updates. Following the successful completion of the external debt restructuring under the G20 Common Framework, Ghana has secured relief amounting to US$5.4 billion in deferred payments. Domestic debt exchanges have also progressed, reducing the debt-to-GDP ratio from 78% at the end of 2024 to a projected 72% by the close of 2025. Dr. Adam stressed the importance of fiscal rules to prevent future debt accumulation, including the establishment of a sinking fund for debt repayment.

Social protection programs were not overlooked. The Livelihood Empowerment Against Poverty (LEAP) program has been expanded to cover an additional 100,000 vulnerable households, with disbursements totaling GH¢1.1 billion. The minister announced measures to integrate climate change adaptation into social interventions, such as subsidies for smallholder farmers affected by erratic weather patterns.

Looking ahead, Dr. Adam outlined forward-looking policies to sustain growth. He projected a GDP growth of 3.5% for the full year, contingent on stable commodity prices and continued reforms. Key risks include geopolitical uncertainties, such as the Russia-Ukraine conflict affecting fertilizer imports, and domestic factors like election-year spending pressures, given the upcoming 2024 general elections (noting the budget's forward orientation to 2025). To mitigate these, the government plans to enhance public-private partnerships (PPPs) in infrastructure and promote export diversification beyond gold and cocoa.

In his concluding remarks, the minister called for bipartisan support in Parliament to approve supplementary appropriations totaling GH¢5.2 billion, necessary for unforeseen expenditures in disaster response and economic stabilization. He reiterated the government's commitment to inclusive growth, job creation, and poverty reduction, aligning with the Sustainable Development Goals (SDGs). The presentation sparked immediate reactions from opposition MPs, who raised concerns over revenue shortfalls and the impact of taxes on ordinary Ghanaians, setting the stage for robust debates in the coming days.

Overall, the 2025 Mid-Year Budget Review paints a picture of cautious optimism for Ghana's economy. It underscores the administration's focus on fiscal prudence, structural reforms, and targeted investments to navigate challenges while fostering sustainable development. As the livestream concluded, analysts noted that the review's success will hinge on effective implementation and external economic conditions, with stakeholders eagerly awaiting the parliamentary deliberations that will shape the final fiscal adjustments. This event not only provides transparency into government finances but also serves as a barometer for Ghana's economic trajectory in a volatile global landscape. (Word count: 1,028)