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Business and Finance
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LIVESTREAMING: Minister of Finance delivers 2025 Mid-Year Budget Review in Parliament

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

In a pivotal session held in Ghana's Parliament, the Minister of Finance delivered the highly anticipated 2025 Mid-Year Budget Review, outlining the government's fiscal strategies, economic performance, and policy adjustments amid ongoing global and domestic challenges. The presentation, streamed live, provided a comprehensive update on the nation's economic trajectory, emphasizing resilience, growth projections, and measures to address inflationary pressures, debt sustainability, and social welfare priorities. The Minister highlighted the government's commitment to prudent fiscal management while navigating the aftermath of the COVID-19 pandemic, geopolitical tensions affecting global trade, and internal factors such as energy sector reforms and agricultural productivity.

The review began with an overview of macroeconomic performance in the first half of the year. The Minister reported that Ghana's GDP growth had shown signs of recovery, projecting an overall growth rate of 3.1% for 2024, with expectations to accelerate to 5% in 2025. This optimism stems from robust performances in the services and industrial sectors, despite setbacks in agriculture due to erratic weather patterns and supply chain disruptions. Inflation, a persistent concern, was noted to have moderated from a peak of over 50% in previous periods to around 23% by mid-2024, attributed to tighter monetary policies by the Bank of Ghana and stabilizing measures in food and fuel prices. The Minister emphasized that these figures align with the Medium-Term National Development Policy Framework, aiming for single-digit inflation by the end of 2025.

Fiscal discipline emerged as a cornerstone of the presentation. The Minister detailed the government's efforts to rationalize public expenditure, reporting a primary surplus of 0.5% of GDP in the first half of the year, a marked improvement from deficits in prior years. Revenue mobilization has been bolstered through digitalization initiatives, including the expansion of the Ghana Revenue Authority's e-levy and value-added tax systems, which have increased collections by 15% year-on-year. However, challenges persist with non-tax revenues, particularly from state-owned enterprises in the energy sector, where inefficiencies have led to accumulated arrears. To address this, the government plans to implement reforms under the IMF-supported Extended Credit Facility, including debt restructuring negotiations that have already yielded agreements with official creditors and progress with Eurobond holders.

On the expenditure side, the Minister outlined allocations for key sectors. Education and health received significant boosts, with GH¢15 billion earmarked for infrastructure projects such as school constructions and hospital upgrades under the Free Senior High School program and the National Health Insurance Scheme. Social intervention programs, including the Livelihood Empowerment Against Poverty (LEAP) initiative, will see expanded coverage to support vulnerable households amid rising living costs. The review also addressed the energy crisis, with plans to invest in renewable sources and improve the efficiency of the Electricity Company of Ghana to reduce power outages and subsidies that strain the budget.

Debt management was a focal point, with the Minister reassuring Parliament that Ghana's debt-to-GDP ratio has stabilized at around 80%, down from higher levels post-pandemic. The government intends to pursue sustainable borrowing strategies, prioritizing concessional loans and domestic financing to avoid over-reliance on high-interest international markets. Updates on the Debt Sustainability Analysis indicated that ongoing restructuring efforts could free up fiscal space for development spending, potentially unlocking additional funding from multilateral institutions like the World Bank and African Development Bank.

Looking ahead to 2025, the Minister projected a fiscal deficit of 4.5% of GDP, aligned with convergence criteria under the Economic Community of West African States (ECOWAS). Revenue targets are set at GH¢180 billion, driven by enhanced tax compliance and diversification into non-traditional exports such as cashew and shea butter. Expenditure is capped at GH¢200 billion, with a focus on capital investments in roads, railways, and digital infrastructure to support the Agenda 111 hospital project and the One District, One Factory initiative. The Minister stressed the importance of private sector involvement, announcing incentives like tax holidays for investors in agribusiness and technology to spur job creation and reduce youth unemployment, which stands at approximately 13%.

The presentation also touched on external factors influencing the economy. Global commodity prices, particularly for cocoa and gold—Ghana's main exports—have provided a buffer, with cocoa prices surging due to supply shortages in West Africa. However, oil price volatility and the cedi's depreciation against major currencies remain risks. The Minister outlined mitigation strategies, including foreign exchange reserve build-up through remittances and export earnings, aiming to maintain reserves at four months of import cover by 2025.

In terms of social and environmental commitments, the review incorporated green growth initiatives. The government plans to allocate funds for climate-resilient agriculture, reforestation under the Green Ghana project, and renewable energy transitions to meet Paris Agreement goals. Gender-responsive budgeting was highlighted, with specific provisions for women's empowerment programs in entrepreneurship and education.

The Minister concluded by calling for bipartisan support in Parliament to approve supplementary appropriations and policy measures, underscoring that the 2025 budget framework is designed to foster inclusive growth, reduce poverty, and position Ghana as a stable economy in sub-Saharan Africa. He fielded questions from MPs on issues like fuel subsidies, public sector wages, and anti-corruption efforts, reaffirming the government's transparency through regular audits and digital procurement systems.

Overall, the 2025 Mid-Year Budget Review paints a picture of cautious optimism, balancing fiscal consolidation with investments in human capital and infrastructure. It reflects the administration's strategy to navigate economic headwinds while laying the groundwork for sustainable development. The session, attended by key stakeholders including opposition leaders and economic experts, underscores the collaborative approach needed to achieve these goals. This review not only assesses past performance but also sets the tone for the upcoming full budget presentation later in the year, with implications for Ghana's long-term economic stability and prosperity. (Word count: 912)

Read the Full Ghanaweb.com Article at:
[ https://www.ghanaweb.com/GhanaHomePage/NewsArchive/LIVESTREAMING-Minister-of-Finance-delivers-2025-Mid-Year-Budget-Review-in-Parliament-1993099 ]