Commentary

2025 Mid-Year Budget Review

Six months ago, the Mahama administration inherited an economy described by Finance Minister Dr. Ato Forson as being in “deep distress.” Public trust in the economy was low, inflation was squeezing household finances, while national debt had soared to unimaginable heights. Yet, within six months, the economy is beginning to take shape, fostering an atmosphere of cautious optimism rather than triumph.

In a notable departure from past mid-year budget reviews, Dr. Forson did not request additional funds, propose new taxes, or submit a supplementary budget. Instead, the government reiterated its commitment to fiscal discipline, vowing to maintain spending cuts while protecting the nation’s most vulnerable citizens.

As Ghana reaches the midpoint of 2025, the country stands at a fragile yet promising crossroads in terms of how the economy is faring.

At the heart of the government’s recovery strategy lies debt restructuring, which involves negotiations with external creditors and tightening domestic financing mechanisms. Ghana’s debt-to-GDP ratio has reached a five-year low, signalling improved macroeconomic discipline. Moreover, the country has received a credit rating upgrade to B- with a stable outlook. This is a marked improvement from its previous “junk” status.

For the average Ghanaian, however, such figures hold significance only if they translate into better services, job opportunities, and a reduced cost of living. Notably, this budget refrained from introducing new taxes or supplementary spending, which the Minister highlighted as a sign of restraint and respect for the economic pressures faced by citizens.

On the budget performance, the government has projected a modest GDP growth rate of 3.1% for the year. Inflation, which once surged beyond 50%, has declined to a four-year low, allowing households and businesses some breathing space. Fuel prices have gone down, the cedi has gained some strength, and essential commodities such as sugar, rice, and cooking oil are now more affordable than they were a year ago.

This is not merely a collection of fiscal data; it reflects a government endeavouring to rebuild economic confidence step by step.

What distinguished this mid-year review from others was the reassertion of the government’s flagship initiative aimed at establishing a 24-hour economy. Intended to unlock employment and enhance productivity, this initiative is designed to stimulate economic activity beyond traditional working hours.

Equally significant was the inclusion of the ‘Big Push’ program, which serves as a cornerstone of President John Mahama’s aggressive infrastructure development agenda. As part of the 2025 Budget, all oil revenues and mineral royalties earmarked in the Budget will be allocated to this ambitious plan, with 13.8 billion cedis dedicated over the next two years solely for road infrastructure.

Nevertheless, it’s essential to be cautious in the attempt to scale the country ‘s problems. Ghana has experienced similar situations before. Announcing grand infrastructure ambitions that ultimately faltered due to bureaucratic delays, cost overruns, and corruption. The months ahead will test not only planning but also the ability to deliver on these promises.

Beyond the macroeconomic indicators, the government’s mid-year budget review indicated a renewed focus on enhancing revenue through administrative reforms rather than increasing tax rates. The Value Added Tax (VAT), for instance, is undergoing streamlining, with efforts aimed at improving compliance and expanding the tax base. The Finance Ministry has maintained its position of not increasing the VAT rate because it could worsen cost pressures on households and small businesses already struggling with inflation. Instead, the government plans to implement technology-driven enforcement and improved monitoring systems to minimize revenue leakages.

Meanwhile, the review reaffirmed commitments to social interventions, with continued funding for programs such as the Free SHS, Livelihood Empowerment Against Poverty (LEAP), and the School Feeding Programme. Although funding allocations remain largely in line with earlier projections, concerns linger about the sufficiency and timeliness of disbursements, particularly in underserved communities. The government insists that protecting vulnerable populations is a priority, but for many, the real test lies in delivery rather than promises.

The review also noted improvements in the energy sector, including efforts to reduce legacy debts and enhance reliability. While these developments are welcomed, the full reform of the sector, especially the operational efficiency of the Electricity Company of Ghana (ECG) and the restructuring of Power Purchase Agreements (PPAs), is still a work in progress.

So, what should the average Ghanaian make of this budget?

It may not introduce sweeping new programs or grand gestures, but it offers something far more important, and that is credibility. In a country where budget promises have often faced public scepticism, this one is, at the very least, grounded in realistic targets, cautious spending, and a commitment to protect the vulnerable.

More importantly, the tone and content of the presentation suggest a government that recognises the weight of its responsibilities and is modest in its approach to recovery. There was no sense of self-congratulation; rather, a measured optimism reflected in phrases like “turnaround in sight” and “renewed hope.”

Ghana’s economy is not out of the woods yet. Jobs remain scarce, inequality persists, and many citizens are still reeling from the effects of years of fiscal mismanagement and global shocks. However, this budget indicates that under steady leadership, there is a conscious and concrete attempt to mend what was broken while planting the seeds for long-term resilience.

In the coming months, the success of this mid-year roadmap will depend not only on policy execution but also on public cooperation. After all, rebuilding trust is as crucial as rebuilding the economy. For now, the message is clear, Ghana is charting a new course with less fanfare, more focus, and a cautious but tangible return of hope.

By: Pearlvis Atsu Kuadey, Video Journalist