Minister of Finance to deliver 2025 Mid-Year Budget Review today

In a high‑profile briefing held yesterday at the Ghanaian Finance Ministry’s headquarters in Accra, Finance Minister Dr. Jacob Kufuor presented the Mid‑Year Budget Review for the 2025 fiscal year. The review – a standard mid‑cycle assessment that gauges the health of the national economy and the progress of policy measures – was delivered to the Minister of Finance’s Cabinet and to a host of government officials, parliamentarians, and members of the business community.

The presentation came at a time when Ghana’s economic landscape remains a mixture of opportunity and uncertainty. After the country’s 2024 budget, which was characterized by a 5.5 % growth forecast, a 15.2 % inflation rate, and a 6.8 % public debt to GDP ratio, the Finance Ministry has been working to keep the economy on a trajectory that balances growth with fiscal prudence.

1. Economic Performance to Date

Dr. Kufuor opened by summarising the economy’s performance to date. The review confirmed that the Ghanaian economy continued to expand at a moderate pace, with real GDP growth holding near 5 % year‑on‑year. He highlighted a number of sectors that have under‑performed or over‑performed:

Agriculture: A 3.4 % increase in output, largely due to a favourable harvest season and sustained investment in irrigation infrastructure.
Manufacturing: A 2.8 % contraction, reflecting supply‑chain constraints and a tightening of domestic credit conditions.
Services: The biggest growth engine, buoyed by tourism and financial services, which grew 6.1 %.

The review underscored that inflation remained firmly above the 3 % target, primarily due to persistent food price pressures and high energy costs. Despite these challenges, the Ministry remains confident that a combination of monetary tightening and targeted fiscal interventions can bring inflation down within the next fiscal year.

2. Fiscal Metrics and Debt Sustainability

Key to the review was a discussion of the fiscal deficit and public debt trajectory. The 2025 budget had projected a primary fiscal deficit of 3.5 % of GDP, a slight contraction from the 3.8 % forecast for 2024. The review confirmed that the deficit has been held in check thanks to the implementation of a 5 % increase in Value Added Tax (VAT) and tighter borrowing standards.

Public debt to GDP is forecast to stand at 60.3 % at the end of 2025, a modest decline from the 61.8 % figure projected for 2024. Dr. Kufuor emphasized that the debt trajectory remains sustainable, citing the “highly disciplined borrowing policy” and the country’s recent record of timely debt servicing. In a nod to investors, he pointed out that Ghana’s debt‑sustainability assessment by the International Monetary Fund (IMF) – published last year – remains favourable, with a projected debt‑to‑GDP ratio of 63 % by 2029.

3. Policy Priorities

The Minister laid out three interlinked policy priorities that he expects to shape the remainder of the 2025 fiscal year:

Growth‑Boosting Investment in Infrastructure
The Ministry will continue to prioritise large‑scale infrastructure projects, especially in the energy and transport sectors. Dr. Kufuor outlined a $2 billion investment package aimed at upgrading the Kotoka International Airport’s capacity and expanding the national electricity grid. The review also highlighted a partnership with the World Bank to fund rural electrification projects.
Fiscal Discipline and Revenue Generation
A 5 % hike in VAT, coupled with a targeted crackdown on tax evasion, is expected to raise an additional $1.2 billion in revenue. The Finance Ministry will also streamline the collection of excise taxes on cigarettes and alcoholic beverages, as part of a broader effort to increase tax compliance.
Social Protection and Poverty Reduction
The review noted the government’s commitment to sustaining and expanding the “Livelihood Empowerment Against Poverty” (LEAP) program. Dr. Kufuor pledged that the 2025 budget will maintain a 3 % allocation for poverty‑reduction programmes, a figure that he argued will help maintain macro‑economic stability and support the poorest households.

4. Challenges and Risk Management

Dr. Kufuor acknowledged a number of risks that could threaten the 2025 fiscal outlook:

External Shocks: A slowdown in the U.S. dollar and a decline in commodity prices could negatively impact Ghana’s trade balance and external debt servicing costs.
Domestic Disruptions: Persistent labor strikes and public sector unrest may affect the supply of public goods and services.
Climate‑Related Risks: Droughts and floods continue to threaten agricultural output, posing a risk to food security and export revenues.

To mitigate these risks, the Ministry will maintain a contingency reserve fund and will continue to monitor inflationary trends closely. In addition, the government will engage with multilateral partners to secure favourable loan conditions, including low‑interest rates and extended repayment periods.

5. Looking Ahead – The 2025 Budget

While the Mid‑Year Review focuses on current performance, the Minister also gave a preview of the forthcoming 2025 budget, slated for release in early July. He confirmed that the budget will maintain a balanced approach: pursuing growth while avoiding an excessive fiscal deficit. The Ministry will prioritise projects that deliver high social returns – such as road construction in rural districts and improvements to primary schools – and will avoid discretionary spending that does not directly contribute to economic productivity.

6. Public and Investor Reception

The review was met with cautious optimism by members of parliament, who largely agreed that Ghana’s economy is on the right track but will require disciplined policy implementation to achieve the targeted macro‑economic goals. Several local investors attended the session and signaled increased confidence in Ghana’s market, citing the government's commitment to fiscal prudence and the ongoing engagement with international financial institutions.

Conclusion

Dr. Jacob Kufuor’s Mid‑Year Budget Review underscored Ghana’s continued commitment to an economy that balances growth with fiscal responsibility. The presentation detailed the country’s macro‑economic performance, fiscal metrics, and policy priorities while candidly addressing the risks that could impede progress. As Ghana moves into the second half of 2025, the focus will remain on delivering targeted infrastructure investments, improving revenue collection, and safeguarding social protection programmes—all aimed at sustaining a stable and inclusive growth trajectory.

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