Summary of 2025 Budget.

14-03-2025

Summary of 2025 Budget.

1. Fiscal consolidation & expenditure control

  • Audit and validation of arrears: a comprehensive audit will be conducted before payments of outstanding arrears of GHS 67.5 billion.
  • Stricter procurement regulations: amendments to the Public Procurement Act to require commencement certificates and budgetary provisions for procurements.
  • Elimination of wasteful programs: programs like GhanaCARES, YouStart, and One District One Factory will be cut.
  • Decentralization: functions of Development Authorities (CODA, NDA, MBDA) reassigned to District Assemblies.
  • Capping and realignment reforms:
    • Road Fund and NHIL will receive full allocations.
    • GNPC’s share of net Carried & Participating Interest (CAPI) reduced from 30% to 15%.
    • Mineral royalties redirected to the Consolidated Fund.

2. Revenue measures

  • Tax Cuts and abolitions: following taxes will be abolished
    • Betting Tax (10% on lottery winnings).
    • E-Levy (1% on electronic transfers)
    • Emission Levy on vehicles & industries
    • VAT on motor vehicle insurance
    • 1.5% withholding tax on unprocessed gold
  • VAT Reforms:
    • COVID-19 Levy will be abolished.
    • GETFund and NHIL re-integrated into VAT to simplify tax structure.
    • Flat rate VAT regime reversed and VAT registration threshold adjusted to exempt small businesses.
  • New Revenue Sources:
    • Growth & Sustainability Levy on mining increased from 1% to 3% to capture windfall gains from high gold prices.
    • Special Import Levy Extended to 2028.
    • Road Tolls reintroduced through a technology-driven system.

3. Social Interventions & Economic Growth Initiatives

  • 24-Hour Economy Policy: will be presented to Parliament to stimulate job creation.
  • Big Push Programme: $10 billion infrastructure development initiative.
  • Ghana Gold Board (GoldBod): New institution to regulate and purchase gold for foreign exchange reserves.
  • No-Academic-Fee Policy: first-year students in public tertiary institutions to have fees waived.
  • Free Tertiary Education for Persons with Disabilities (PWDs).
  • Free Primary Healthcare & MahamaCares for treating non-communicable diseases.
  • Free Sanitary Pads for schoolgirls (GHS 292.4 million allocated).
  • School Feeding Programme budget increased by 33%, per meal cost rising from GHS 1.50 to GHS 2.00.
  • Teacher & Nursing Trainee Allowances: GHS 203 million & GHS 480 million allocated.
  • Road Fund Uncapped: GHS 2.81 billion allocated solely for road maintenance.
  • LEAP Programme Expanded: beneficiary households increased to 400,000 with a 30.8% budget increase.
  • Women’s Development Bank: GHS 51.3 million allocated.
  • Labour Export Programme: formalized migration for Ghanaian workers abroad.

4. Debt Management & Fiscal Policy

  • Debt Restructuring: 93% of restructuring completed; remaining $2.7 billion owed to commercial creditors.
  • Sinking Fund Revitalized: first-time implementation of Public Financial Management Act (2016) sections on debt management.
  • Treasury Bill Rates Reduced: 91-day T-bill rate reduced from 28.19% to 17.72% within two months.
  • Government Size Reduction: number of ministries cut from 30 to 23, ministers reduced from 88 to 60.

Macroeconomic Targets for 2025

  • Real GDP Growth: 4.0% (non-oil GDP growth: 4.8%).
  • Inflation: Targeted at 11.9%.
  • Primary Budget Surplus: 1.5% of GDP.
  • Gross International Reserves: at least 3 months of import cover.

Conclusion

The budget aims to reset Ghana’s economy through aggressive spending cuts, targeted social interventions, tax simplifications, and new revenue mobilization measures. Key reforms focus on macroeconomic stability, job creation, and debt sustainability, with major commitments to social welfare and infrastructure development.

GNBCC | News