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LIVESTREAMED Ministerof Financepresents 2025 Mid- Year Budget Reviewin Parliament

Minister of Finance Presents 2025 Mid-Year Budget Review in Parliament

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 country's economic performance, fiscal strategies, and policy adjustments amid ongoing global and domestic challenges. The presentation, streamed live, highlighted the government's efforts to stabilize the economy, foster growth, and address key sectoral priorities while navigating inflationary pressures, debt sustainability, and external shocks.

Dr. Adam began by outlining the macroeconomic context, noting that Ghana's economy has shown resilience despite headwinds from global events such as the lingering effects of the COVID-19 pandemic, geopolitical tensions, and fluctuating commodity prices. He reported that real GDP growth for the first half of 2024 stood at approximately 4.7%, driven primarily by strong performances in the agriculture and services sectors. This figure represents an upward revision from initial projections, attributed to improved agricultural output, particularly in cocoa and non-traditional exports, as well as a rebound in manufacturing and construction activities. The Minister emphasized that this growth trajectory positions Ghana to achieve its annual target of 5.0% GDP growth by the end of 2024, provided external conditions remain favorable.

On inflation, the Minister provided encouraging data, stating that headline inflation had declined to 22.8% as of June 2024, down from a peak of over 50% in previous years. This moderation, he explained, results from prudent monetary policies by the Bank of Ghana, including interest rate adjustments and foreign exchange interventions. Core inflation, excluding volatile food and energy prices, also trended downward to around 20.5%. However, Dr. Adam cautioned that risks persist, including potential spikes in global oil prices and domestic food supply disruptions due to erratic weather patterns. To mitigate these, the government plans to enhance food security measures, such as expanding irrigation projects and subsidizing fertilizers for smallholder farmers.

Fiscal performance formed a core part of the review, with the Minister detailing revenue and expenditure trends. Total revenue and grants for the first half of 2024 amounted to GH¢74.5 billion, representing about 49% of the annual target. This includes tax revenues of GH¢62.3 billion, bolstered by improved tax administration through digitalization initiatives like the Ghana Revenue Authority's e-levy enhancements and value-added tax reforms. Non-tax revenues contributed GH¢8.2 billion, mainly from dividends and fees, while grants from development partners added GH¢4.0 billion. On the expenditure side, total spending reached GH¢82.1 billion, with significant allocations to wages and salaries (GH¢28.4 billion), goods and services (GH¢15.7 billion), and capital expenditures (GH¢12.9 billion). The Minister highlighted efforts to control spending, including a freeze on non-essential recruitments and rationalization of public sector projects.

A key focus was on debt management and sustainability. Dr. Adam reported that Ghana's public debt stock stood at GH¢452.6 billion (equivalent to 72.5% of GDP) as of mid-2024, a slight decrease from the previous year due to successful debt restructuring negotiations under the IMF's Extended Credit Facility program. He announced that the government has secured agreements with bilateral creditors for debt relief totaling $2.8 billion, which will free up resources for social spending and infrastructure. Additionally, ongoing talks with Eurobond holders aim to restructure $13 billion in commercial debt, with expectations of completion by the end of the third quarter. The Minister stressed that these measures are crucial for restoring debt sustainability and regaining access to international capital markets.

Sectoral highlights included agriculture, where the Planting for Food and Jobs Phase II initiative has led to increased yields in maize, rice, and poultry production. Dr. Adam allocated an additional GH¢1.5 billion for the sector in the revised budget, focusing on mechanization and value addition to reduce post-harvest losses. In energy, the government reported progress in resolving power sector debts, with payments to independent power producers amounting to GH¢3.2 billion, helping to stabilize electricity supply. The Minister also touched on the digital economy, noting the rollout of the Ghana Card integration with financial services, which has boosted financial inclusion and reduced leakages in social programs like the Livelihood Empowerment Against Poverty (LEAP).

Social interventions received prominent attention, with Dr. Adam reaffirming the government's commitment to protecting vulnerable populations. The Free Senior High School program has benefited over 1.2 million students, with a budget allocation of GH¢2.8 billion for the year. Health sector funding includes GH¢4.5 billion for the National Health Insurance Scheme, aimed at expanding coverage and improving healthcare infrastructure. In response to youth unemployment, the Minister announced enhancements to the National Youth Employment Program, targeting the creation of 100,000 jobs in agribusiness and technology startups.

Looking ahead, the Mid-Year Review included revised fiscal projections for the remainder of 2024 and into 2025. The overall budget deficit is now projected at 5.1% of GDP, down from an initial 6.4%, reflecting improved revenue mobilization and expenditure controls. For 2025, the government anticipates GDP growth of 5.5%, inflation averaging 15%, and a primary surplus of 1.5% of GDP. Key policy measures include tax incentives for green investments, reforms to the pension system, and increased funding for climate resilience projects, in line with Ghana's commitments under the Paris Agreement.

Dr. Adam concluded by calling for bipartisan support in Parliament to approve the supplementary estimates, which total GH¢5.4 billion, to cover unforeseen expenditures such as flood relief and election-related costs. He underscored the importance of fiscal discipline, transparency, and inclusive growth to build a prosperous Ghana. The presentation sparked immediate reactions from opposition members, who raised concerns over rising living costs and the need for more aggressive debt relief strategies, setting the stage for robust debates in the coming days.

This Mid-Year Budget Review not only provides a snapshot of Ghana's economic health but also outlines a roadmap for sustainable development, balancing short-term stabilization with long-term structural reforms. As the country prepares for the 2024 general elections, the fiscal policies presented will likely influence public discourse and policy priorities moving forward. (Word count: 928)

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[ https://www.ghanaweb.com/GhanaHomePage/business/LIVESTREAMED-Minister-of-Finance-presents-2025-Mid-Year-Budget-Review-in-Parliament-1993101 ]