Breakdown of Ghana’s 2025 Budget Statement (Finance Minister Ato Forson)

Context & Objectives: The 2025 Budget (theme: “Resetting the Economy for the Ghana We Want”) was presented by Finance Minister Dr. Cassiel Ato Forson on March 11, 2025​

citinewsroom.com. It addresses a challenging economic situation and outlines measures to stabilize and grow the economy. Below is a point-by-point breakdown:

Key Economic Policies and Initiatives

• Economic “Shock Therapy”: The government is implementing a “shock therapy” of spending cuts and reforms to restore stability and growth​reuters.com. This involves cutting wasteful expenditures, restructuring debt, and tightening financial controls.
• 24-Hour Economy Policy: A 24-Hour Economy initiative will encourage round-the-clock business operations to boost productivity and job creation​citinewsroom.com. Laws like the Labour Act and GIPC Act will be reviewed to support this, with a formal policy paper to be presented to Parliament​citinewsroom.com.
• Debt Restructuring & Fiscal Discipline: High priority is placed on restructuring public debt and reducing the fiscal deficit. The government aims to “reset” the economy through tough reforms, aligning spending with revenue to regain macroeconomic stability​citinewsroom.com​reuters.com. Ministries have been trimmed (from 30 to 23) and ministerial positions cut (88 to 60) to reduce costs​techlabari.com.
• Stabilizing the Cedi: Plans include building foreign exchange reserves by establishing a Ghana Gold Board to use gold for reserves accumulation​citinewsroom.com. This is meant to stabilize the Ghanaian cedi and protect against external shocks.
• Infrastructure “Big Push”: Launch of a “Big Push” infrastructure program (about GH¢13.85 billion) to invest in roads, bridges, markets, and hospitals​myjoyonline.com. This aims to stimulate growth and improve critical infrastructure nationwide.

Revenue Projections and Sources

• Higher Revenue Target: Total Revenue and Grants for 2025 is projected at GH¢223.8 billion (≈17.2% of GDP)​citinewsroom.com. This is a significant increase from the GH¢186.5 billion collected in 2024, reflecting expectations of economic rebound and better tax compliance.
• Tax Base and Compliance: The revenue boost will come from non-oil taxes and improved compliance measures​citinewsroom.com. For instance, the budget plans to raise about 0.5% of GDP in extra income through broadening the tax base and enforcement. An upward adjustment of the VAT registration threshold will exempt many small businesses from VAT, focusing collection on larger taxpayers​myjoyonline.com.
• Oil & Mining Receipts: Higher receipts from oil and gas (which outperformed expectations in 2024) are anticipated to continue supporting revenue​citinewsroom.com. Additionally, mining levies will be adjusted to capture windfall gains from high gold prices​techlabari.com, ensuring the state benefits more when commodity prices are strong.
• Non-Tax Revenues: The government also plans to strengthen non-tax income. For example, road tolls (which had been abolished) will be reintroduced via digital payments​techlabari.com, and other fees will be optimized with technology to improve collection. This will help compensate for any revenue lost from tax cuts.

Expenditure Plans and Priority Sectors

• Reduced Overall Spending: Total expenditure for 2025 is budgeted at GH¢269.1 billion (about 20.7% of GDP), slightly lower than the GH¢279.2 billion spent in 2024​citinewsroom.com. This reduction is deliberate to cut the deficit – a fiscal austerity move. Despite the cutback, the budget prioritizes social programs and development projects.
• Education: Education receives a major boost. The Free Senior High School (SHS) program continues with GH¢3.5 billion allocation​myjoyonline.com. A new “No-Academic-Fee” policy will make the first year of public tertiary education free, allocated GH¢499.8 million​myjoyonline.com. Other education support includes GH¢564 million for free textbooks and GH¢1.79 billion to expand the School Feeding Programme (providing meals to pupils)​myjoyonline.com. Teacher and nursing trainee allowances are maintained (over GH¢680 million combined) to support students in training​myjoyonline.com.
• Healthcare: The National Health Insurance Scheme (NHIS) is funded with GH¢9.93 billion​myjoyonline.com. Notably, the government plans to introduce free primary healthcare (under a “MahamaCare” initiative) using the NHIS as a vehicle​techlabari.com. Investments will also target improving healthcare infrastructure as part of the Big Push (e.g. hospital projects).
• Social Protection: Significant resources go into social interventions. For example, GH¢292.4 million is set aside to provide free sanitary pads to schoolgirls​myjoyonline.com – a move to reduce school absenteeism among girls. Cash transfer programs like LEAP (Livelihood Empowerment Against Poverty) will see increased funding (exact figures not in the statement, but emphasis on protecting the vulnerable)​techlabari.com. There’s also GH¢100 million for a new “Adwumawura” program and GH¢300 million for a National Apprenticeship Programme to tackle youth unemployment through skills training​myjoyonline.com.
• Infrastructure & Local Development: Apart from the GH¢13.85 billion “Big Push” for national infrastructure​myjoyonline.com, the budget allocates funds for local development. The District Assemblies Common Fund (DACF) gets GH¢7.51 billion and the Road Fund GH¢2.81 billion for maintaining feeder roads and urban roads​myjoyonline.com. A seed fund of GH¢51 million will establish a Women’s Development Bank to support female entrepreneurs​myjoyonline.com.
• Disaster Relief: In response to recent disasters, the budget provides GH¢242.5 million to support victims of the Akosombo Dam spillage (flooding) and GH¢200 million for victims of tidal waves in Ketu South​myjoyonline.com. These funds will help rebuild lives and infrastructure in affected communities.
• Efficiency Cuts: To free up resources for these priority areas, the government is eliminating or repurposing some previous programs considered “wasteful or duplicative.” For instance, programmes like GhanaCARES, YouStart, and One District One Factory will be wound down or integrated into existing structures​techlabari.com. The roles of regional development authorities are being reassigned to local assemblies to cut overhead costs​techlabari.com.

Major Macroeconomic Indicators and Targets

• GDP Growth: Ghana’s economy grew 5.7% in 2024, significantly above the 3.1% budget projection​myjoyonline.com. This higher-than-expected growth indicates some resilience (aided in part by outputs in sectors like gold, even including illicit small-scale mining contributions, as the Minister noted). For 2025, the budget sets a growth target of around 4.0% for overall real GDP​techlabari.com, reflecting cautious optimism given the ongoing reforms. Non-oil GDP is projected to grow about 4.8%, emphasizing diversification beyond oil​techlabari.com.
• Inflation: Inflation remained high in 2024, ending the year at 23.8% (up from 23.2% in 2023)​citinewsroom.com. This overshot the 2024 target (15%) by almost 9 percentage points​citinewsroom.com, indicating a persistent cost-of-living crisis. The 2025 budget aims to sharply reduce inflation to 11.9% by end-2025​techlabari.com. Achieving this will rely on tight monetary policy by the Bank of Ghana and fiscal measures to stabilize prices (such as improving food production to curb food inflation).
• Fiscal Deficit: The fiscal deficit (overall budget balance) is set to narrow. In 2024 the deficit was about 3.9% of GDP (on commitment basis)​reuters.com – higher than planned, partly due to revenue shortfalls and extra costs. For 2025, the deficit is projected at 3.1% of GDP​reuters.com (≈GH¢43.8 billion). In fact, the government is targeting a primary budget surplus of 1.5% of GDP​techlabari.com, meaning excluding interest payments the budget will be in surplus – a sign of returning to discipline.
• Public Debt: Ghana’s public debt stock remains high but saw an improvement due to ongoing debt restructuring. By end of 2024, debt-to-GDP was reported at about 65.7%​myjoyonline.com​myjoyonline.com, down from levels that were over 90% before the IMF-supported debt operations. The debt stands at roughly GH¢726.7 billion in absolute terms​techlabari.com. The government acknowledges this is still unsustainable and has committed to complete debt restructuring (external and domestic) as soon as possible​reuters.com. About $8.7 billion of external debt service is due in the next four years (10.9% of GDP), with heavy repayments in 2027–2028​reuters.com – hence the emphasis on negotiations with creditors.
• Currency and Reserves: The cedi’s stability is a priority. The budget aims to build Gross International Reserves to cover at least 3 months of imports in 2025​techlabari.com. By leveraging gold (via the new Gold Board) and securing IMF disbursements, authorities hope to shore up the central bank’s reserves, which should help stabilize the exchange rate and prevent sharp currency depreciation.

Notable Quotes from the Budget (and What They Mean)

• “We inherited an economy in deep crisis.” – Dr. Ato Forson​citinewsroom.com. This stark phrase acknowledges that the new government found the economy in bad shape – characterized by high debts, large unpaid bills, and fiscal imbalances. (In simple terms: the country’s finances were in a dire condition when the new administration took over.)
• “Whoever pays off their debt gets rich.” – Dr. Ato Forson​citinewsroom.com. With this proverb-like quote, the Minister stressed the importance of debt repayment and fiscal responsibility. (Simplified: Paying down our debts is the path to prosperity.) It underlines the budget’s focus on reducing Ghana’s debt burden to secure future economic health.
• “Ghanaians … expressed a clear desire for the fiscal deficit and public debt to be reduced through cuts in government spending rather than through only tax measures. We wholeheartedly agree!”​citinewsroom.com. Here, the Minister notes public input (from a National Economic Dialogue) that the government should fix the budget by cutting its own spending, not just by taxing people more – and he commits to that approach. (In plain language: People want us to tighten government belt, not just squeeze taxpayers, and we are listening.)
• “Resetting the economy for the Ghana we want.”​citinewsroom.com – This is the theme of the 2025 Budget. It encapsulates the goal of the government’s economic program: to fundamentally reform and rebuild the economy into one that delivers jobs, accountability, and shared prosperity. (In essence: overhaul the economy now to achieve the prosperous Ghanaian future we all seek.)
• “Shock therapy” to restore stability and growth​reuters.com – The Minister used this term to describe the bold, painful measures being taken. (Meaning: drastic and immediate actions will be taken to fix the economy, even if they are tough in the short term.) This includes scrapping certain taxes and cutting spending quickly to “shock” the economy onto a new path.

Tax Policy Changes and Fiscal Measures

• Abolished Taxes (“Nuisance Taxes”): The budget fulfills campaign promises by scrapping several taxes that were seen as burdensome​myjoyonline.com. Key eliminations include:
  • The 1% COVID-19 Health Levy (added on VAT during the pandemic) – this levy will be removed by end of 2025​myjoyonline.com​myjoyonline.com.
  • The E-Levy (1% tax on electronic money transfers) – to be abolished to reduce costs on mobile money transactions​myjoyonline.com.
  • “Betting Tax” on Lottery Winnings (10% withholding on wins) – abolished as well​myjoyonline.com. This aims to put more winnings back in the pockets of bettors and encourage compliance rather than evasion.
  • Emission Levy on vehicles/industries – removed​techlabari.com. (The Minister listed an “emissions levy” for removal, aligning with the goal to eliminate taxes that have little benefit or were complicating the tax system.)
  • VAT on Motor Vehicle Insurance – removed to make insurance cheaper​myjoyonline.com. (This tax was proposed earlier; its removal prevents higher insurance costs for vehicle owners.)
  • Withholding tax on gold exports (1.5%) – abolished, to formalize gold trading and not punish small-scale miners who sell gold legally (mentioned in speech, though this tax was arguably not being enforced)​myjoyonline.com.
• VAT Reforms: Beyond removing specific levies, the VAT system is being reformed to ease the burden on businesses and consumers​myjoyonline.com​myjoyonline.com. The GETFund (2.5%) and NHIL (2.5%) levies will be re-integrated into the VAT structure​myjoyonline.com, allowing businesses to claim input credits on them. This effectively lowers the effective VAT rate (currently ~22% including all addons) for consumers and firms​myjoyonline.com​myjoyonline.com. The flat VAT rate regime (a simplified tax for certain retailers) will be reviewed or reversed​myjoyonline.com to improve fairness. Additionally, as noted, the VAT registration threshold will be raised to spare micro and small enterprises from VAT collection duties​myjoyonline.com – reducing compliance costs for small businesses.
• New or Adjusted Taxes: To compensate for revenue lost from the abolishments and to enhance fairness, the government is introducing a few measures:
  • Reintroduction of Road Tolls: Road tolls on highways will return, but collected electronically to reduce leakages and traffic queues​techlabari.com. This user-fee system will generate funds for road maintenance while using technology to ensure transparency.
  • Increased Mining Levy: As part of capturing windfalls from natural resources, the budget increases taxes/levies on the mining sector, especially gold. This includes higher rates (e.g. an increased Growth and Sustainability Levy for mining companies) and potentially a special mechanism to tax gold windfall profits​techlabari.com. The idea is that when gold prices are high, the nation should gain more revenue.
  • Special Import Levy Extension: An existing levy on imports that was due to expire is extended through 2025–2028​myjoyonline.com​myjoyonline.com. This levy continues a small charge on certain imported goods to raise revenue and encourage local production.
  • Removal of Some Exemptions: The budget removes the VAT exemption on life insurance premiums​myjoyonline.com. While this means life insurance policies will now attract VAT, it closes a loophole and broadens the tax base slightly. The impact on most citizens is minimal (life insurance penetration is relatively low), but it contributes to revenue.
• Other Fiscal Measures: The government will reduce the tax refund ratio from 6% to 4%​techlabari.com. In practice, this means when businesses have excess input VAT (or other tax credits), a smaller portion will be paid out in cash refunds. Instead, the government keeps more, saving about GH₵3.8 billion that will offset revenue lost from the abolished taxes​techlabari.com. In essence, rather than outright new taxes, the state is conserving cash by holding back some refunds as a financing measure (a move welcomed by some analysts as smart management​myjoyonline.com​myjoyonline.com).

Social Intervention Programs and Stimulus Initiatives

• Free Tertiary Education (First Year): A flagship social program in this budget is the “No Fees, Stress-Free” tertiary initiative. All newly admitted students into public tertiary institutions will not pay academic fees for their first year, easing the financial burden on families​myjoyonline.com. This policy is aimed at improving access to higher education and human capital development.
• Free Sanitary Pads for Girls: To promote girls’ education and health, the government will distribute free sanitary pads to female students nationwide​myjoyonline.com. With nearly GH¢292 million budgeted, this addresses “period poverty” and is expected to improve school attendance and comfort for girls (especially in rural and low-income communities).
• School Feeding Expansion: The School Feeding Programme – which provides free meals to primary school children – is getting GH¢1.788 billion​myjoyonline.com to expand and possibly increase the feeding grant per child. This is both a social safety net (reducing hunger) and a stimulus to local agriculture (since caterers buy local food).
• Healthcare Initiatives: The large NHIS allocation (GH¢9.93 billion) includes funding for Free Primary Healthcare for all Ghanaians​techlabari.com. This means basic healthcare at clinics and health centers would have no out-of-pocket cost, improving access and preventative care. There’s also a program dubbed “MahamaCare” under the health budget, likely targeting improvements in health infrastructure and services​techlabari.com. These health initiatives act as social interventions to protect households from medical expenses and to improve public health outcomes.
• Youth Employment and Skills: Government is rolling out programs to tackle unemployment, especially among youth:
  • The National Apprenticeship Programme (GH¢300 million) will provide vocational training and skilled apprenticeships to young people​myjoyonline.com who may not have formal education, thereby improving their job prospects.
  • “Adwumawura” Program (GH¢100 million) – “Adwumawura” implies “jobs creator” in Akan; this program likely supports entrepreneurship and small businesses to create jobs​myjoyonline.com.
  • National Coders Programme (GH¢100 million) – an initiative to train youth in digital skills and coding​myjoyonline.com, positioning them for opportunities in the tech sector.
  • A Labour Export Programme is introduced to help skilled and unskilled Ghanaian workers find employment abroad in a structured manner​techlabari.com. The idea is to formalize migration for work (for example, nurses, artisans, etc.), which can ease domestic job pressure and bring in remittances.
• Targeted Industry Support: While no large new industrial program is announced (since some like 1D1F are being phased out), the budget does seed-capitalize the Women’s Development Bank (GH¢51 million) to support women-led businesses​myjoyonline.com. It also continues support for agriculture through the Agriculture for Economic Transformation (AETA) program (GH¢1.5 billion)​myjoyonline.com, which will invest in modernizing farming, improving yields, and tackling food inflation by boosting local food production.
• Emergency Relief Funds: As mentioned, substantial funds are allocated to disaster relief for flood victims in the Akosombo and Ketu South areas​myjoyonline.com. Moreover, the budget likely sets aside contingency funds for other potential emergencies, ensuring the government can respond to social crises (though specific details beyond the two noted disasters were not listed).

Impact on Businesses, Households, and Economic Stability

• Impact on Businesses: Overall, the 2025 budget offers a mixed but largely positive outlook for businesses. On one hand, firms will benefit from tax reliefs – the elimination of e-levy reduces transaction costs, and VAT reforms mean businesses can claim more input tax credits (lowering effective tax burden)​myjoyonline.com​myjoyonline.com. The abolition of nuisance taxes and improved macro stability should enhance the business climate. Small enterprises, in particular, gain from the higher VAT threshold and the government’s promise to clear arrears owed to contractors (injecting cash into the private sector)​citinewsroom.com​citinewsroom.com. On the other hand, some companies will face higher levies (e.g. in mining and import sectors) and delayed tax refunds (only 4% cap now) which could tighten cash flows​techlabari.com. The reintroduction of road tolls means transport and logistics firms will again pay tolls, albeit with smoother collection. Importantly, the budget’s focus on stability – lowering inflation and stabilizing the currency – if achieved, will greatly help businesses plan and invest with more certainty. As one analyst noted, removing distorting taxes while cutting the deficit is “a rare combination of good politics and smart policy” for long-term business confidence​reuters.com​reuters.com.
• Impact on Households: For households, the budget provides relief and support in several ways. Consumers will see a slight easing in the tax burden – for example, the prices of mobile money services, lottery wins, and certain goods should drop a bit without the e-levy, betting tax, and Covid levy. If the VAT reforms succeed, retail prices could stabilize or grow slower. Social interventions directly target household welfare: free SHS and now free first-year tertiary fees mean many families will save on education costs​myjoyonline.com​myjoyonline.com. Free primary healthcare and expanded NHIS coverage mean medical expenses for basic services should reduce. Programs like school feeding and LEAP put food on the table and cash in the pockets of the poorest families. However, households could face some indirect negatives: for instance, any increase in mining levies or import levies might pass through to prices (though minimal for everyday goods). Also, if tax refunds are withheld from businesses, there is a risk (hopefully small) that some cost could be passed to consumers. Crucially, if the budget’s macro goals are met – particularly bringing inflation down from ~24% to ~12%​techlabari.com – the average household will gain huge relief in cost of living, as price stability returns to food, fuel, and transportation.
• Overall Economic Stability: This budget is designed to restore credibility and stability to Ghana’s economy. By aggressively cutting the deficit and aiming for a primary surplus, the government sends a signal of fiscal responsibility that can reassure investors and the IMF​citinewsroom.com​reuters.com. The anticipated outcome is a more stable currency (preventing the cedi free-fall seen in the recent past) and lower interest rates in the medium term, as public finances come under control. The clearance of arrears (over GH¢67 billion owed)​citinewsroom.com​citinewsroom.com will also stabilize the financial sector – contractors and banks will be strengthened when government pays its bills, reducing non-performing loans and improving liquidity. While some measures (the “shock therapy”) may cause short-term pain or slower growth in certain areas (government spending cuts can contract public-sector driven activities), the emphasis on infrastructure and social support aims to stimulate the real economy and job creation in a sustainable way. If executed properly, the budget should improve Ghana’s debt metrics (debt-to-GDP trending downward) and keep the nation on track with the IMF program, ultimately leading to a more resilient economy. In summary, businesses should operate in a more predictable environment, households should gradually experience relief from economic hardships, and the country’s overall economic health is expected to improve, setting the stage for future growth.

References: This summary is based on the official 2025 Budget Statement and Economic Policy presented to Parliament (full text available via Ghana’s Ministry of Finance and Ghana News Agency) and analyses from credible news sources. Key details have been drawn from the budget speech​

citinewsroom.com​

citinewsroom.com and reporting by Reuters and major Ghanaian media​

reuters.com​

myjoyonline.com to ensure accuracy and clarity. For further reading, you can consult the full budget statement released by the Ministry of Finance​

gna.org.gh​

gna.org.gh, which provides comprehensive tables and policy details.