Ghana’s 2025 budget has drawn cautious praise for its tax reforms but faces scrutiny over sluggish growth forecasts and revenue targets.
The Institute for Statistical, Social, and Economic Research (ISSER) warned that while proposed measures could stimulate private-sector activity, persistently low GDP projections risk undermining poverty reduction and long-term economic stability.
The budget, unveiled last week, includes tax relief for small businesses and middle-income earners, a move ISSER called “a step toward easing cost-of-living pressures.” Corporate tax exemptions for startups in agriculture and renewable energy sectors aim to spur job creation. However, the government’s plan to raise corporate and property taxes by 45% to boost revenues has raised eyebrows. ISSER cautioned that aggressive hikes could strain firms already grappling with inflation and currency volatility.
Ghana’s GDP is projected to grow by 2.8% in 2025, below the Sub-Saharan African average of 3.4%. ISSER Director Peter Quartey noted the figure falls short of the 5–7% needed to significantly curb poverty. “Slower growth risks prolonging debt sustainability challenges and weakening investor confidence,” he said. The forecast contrasts with Finance Ministry claims of “steady recovery” post-2023’s 1.5% contraction.
A contentious move to scrap the 10% betting tax, which generated GH₵140 million ($10.3 million) in 2024, has drawn sharp criticism. ISSER argued the revenue—double the GH₵72 million expected from reinstated road tolls—should fund youth programs amid 46% unemployment in the under-35 demographic. “Prioritizing tolls over betting taxes lacks both economic and social logic,” Quartey said.
The government aims to narrow its fiscal deficit to 5.8% of GDP, banking on improved tax compliance and oil output. Yet ISSER flagged risks: corporate tax collection missed targets by 22% in 2024, while property tax reforms face administrative hurdles. Analysts warn that overreliance on volatile commodity exports and slow non-oil revenue growth could derail deficit goals.
While tax relief may ease business costs, analysts say tepid growth projections signal muted short-term opportunities. “Investors will watch whether revenue reforms materialize without stifling recovery,” said Accra-based Financial Journalist Roger A. Agana. “The budget’s success hinges on execution, not just intent.”
As debates over fiscal priorities intensify, Ghana’s balancing act between austerity and growth remains under a microscope. For now, optimism persists—but patience is wearing thin.
