On March 11, 2025, Ghana’s fiscal destiny took center stage as President Mahama’s new budget was unveiled, charting a daring roadmap for economic recovery and reform.
In a speech delivered by Finance Minister Cassiel Ato Forson, the government laid out sweeping measures designed to rein in unsustainable debt, streamline public administration, and stimulate both domestic and foreign investment.
This ambitious fiscal blueprint signals not only a commitment to fiscal discipline but also a transformative agenda aimed at resetting the economy for a future defined by stability and inclusive growth.
At the heart of the new budget is the urgent need to address Ghana’s burgeoning debt burden. The nation inherited a precarious fiscal situation, marred by arrears that total tens of billions of cedis, including a staggering GH¢67.5 billion owed to government contractors and suppliers. Critical infrastructure sectors, particularly the road network, have been hit hard, with arrears in this segment alone reaching GH¢21 billion.
In response, the government has ordered a comprehensive audit of all outstanding claims—a move intended to ensure that every public expenditure meets rigorous standards of transparency and value for money. This decisive step is aimed at restoring investor confidence and reestablishing credibility in a system that has long been criticized for fiscal opacity and inefficient spending.
In tandem with this debt management strategy, the new budget signals an aggressive restructuring of government operations. The decision to downsize the ministerial cabinet—from 88 to 60 ministers—and to consolidate the number of ministries from 30 to 23 is a clear indication of the administration’s resolve to cut administrative bloat and reduce wasteful spending.
These measures, which might appear purely cosmetic to some, carry significant fiscal implications. They are expected to not only streamline decision-making processes but also to create substantial savings that can be redirected to more productive areas of the economy.
Perhaps one of the most popular elements of the budget is the sweeping tax relief program. By scrapping taxes that have long been seen as burdensome—such as the Electronic Transfer Levy (E-Levy) and the 10% tax on lottery winnings—the government aims to ease the financial strain on households and small businesses. This tax cut, however, is not without its risks. Critics warn that eliminating these revenue streams could widen the fiscal gap if not counterbalanced by other measures.
To address this, the administration has also introduced tighter controls on tax refunds and is recalibrating the Growth & Sustainability Levy on mining companies, ensuring that Ghana captures a fair share of the windfall from rising commodity prices. These dual measures are designed to stimulate private sector activity while safeguarding the government’s revenue base.
The new fiscal framework places significant emphasis on stabilizing the Ghanaian cedi, which has experienced sharp depreciation in recent months. A key component of this effort is the creation of the Ghana Gold Board—a mechanism designed to harness the country’s rich natural resources to boost foreign exchange reserves.
By streamlining the purchasing, refining, and export of gold, the board is expected to generate a steady inflow of foreign currency, providing a vital buffer against external shocks. Alongside this, the government has committed to strict fiscal consolidation and improved revenue management, measures that are already yielding positive results as evidenced by a notable reduction in treasury bill rates.
Beyond the numbers, the budget is also an exercise in bold structural reforms. It places a premium on long-term economic renewal by investing in critical infrastructure and social programs. With an earmarked US$10 billion “Big Push” initiative for strategic infrastructural development, the government is betting on modernizing the nation’s transport, energy, and industrial sectors to drive sustained growth.
Concurrently, significant resources have been allocated to social interventions such as free primary healthcare, expanded educational funding, and direct support to vulnerable communities. These initiatives are designed not only to address immediate economic hardships but also to lay the groundwork for a more inclusive society where every Ghanaian has the opportunity to thrive.
Investors and market analysts have greeted the budget with cautious optimism. Early indicators—such as a rapid fall in short-term treasury bill rates—suggest that the measures have begun to restore faith in Ghana’s economic governance. Yet, challenges remain.
The government’s ambitious reforms must navigate complex sectoral issues, from the chronic energy shortfalls and mismanagement in the cocoa industry to lingering problems within the financial sector. Each of these areas presents its own set of hurdles, and the success of the new fiscal policy will depend on effective implementation and sustained political will.
What sets this budget apart is not merely its bold numerical targets but its overarching vision—a vision to reset Ghana’s economic model and restore a sense of national purpose.
The reforms are a repudiation of past practices that saw unchecked borrowing and inefficient spending, and a promise that fiscal responsibility will be the bedrock of a new era. In the corridors of power, there is a palpable sense of urgency, as policymakers recognize that the challenges before them are as much about restoring public trust as they are about balancing the books.
As Ghana embarks on this transformative journey, the coming months will be critical in determining whether these policies can deliver on their promise. For now, the new budget stands as a comprehensive blueprint for change—a reset button, if you will, for an economy in need of a fresh start.
With debt under control, government spending reined in, and a renewed commitment to structural reform, Ghana is poised to step into a future that, while fraught with challenges, holds the promise of stability, growth, and prosperity for all its citizens.
In this pivotal moment, Ghana is not just recalibrating its fiscal policy—it is redefining its economic identity. And if the government’s resolute actions continue on this path, the nation could very well emerge as a model for emerging economies striving to balance fiscal discipline with the imperative of social progress.
