The Big Picture
Ghana’s 2025 budget is a bold attempt to reset the economy after years of fiscal mismanagement and mounting debt. The government is trying to walk a tightrope: cutting spending to stabilize the economy while still investing in critical areas like education, infrastructure, and social protection. Think of it as a mix of austerity and targeted stimulus—a tough balancing act, but one that’s necessary given the mess the country is in.
Revenue and Spending: The Numbers
| Category | 2025 Target (GH¢) | % of GDP | What It Means |
| Total Revenue & Grants | 223.8 billion | 17.2% | The government plans to collect more taxes, especially from mining companies. |
| Total Spending | 269.1 billion | 20.7% | Spending is being cut, but not across the board—key programs are being protected. |
| Primary Spending | 204.7 billion | 15.8% | This is spending after interest payments. It’s down significantly from 2024. |
| Overall Deficit | 43.8 billion | 3.1% | The government will spend more than it earns, but the deficit is shrinking. |
| Primary Surplus | 20.3 billion | 1.5% | Before interest payments, the government will have a small surplus. |
Where the Money Is Going
| Programme/Initiative | 2025 Allocation (GH¢) | Why It Matters |
| Big Push Programme | 13.85 billion | A massive infrastructure push to boost growth and create jobs. |
| No-Academic-Fee Policy | 499.8 million | Free tuition for first-year college students—a big win for education access. |
| Free Sanitary Pads | 292.4 million | A small but meaningful step to support girls’ education and health. |
| Free Secondary Education | 3.5 billion | Free high school education, now with dedicated funding. |
| Road Fund | 2.81 billion | A huge increase for road maintenance—critical for trade and daily life. |
| District Assembly Common Fund | 7.51 billion | 80% goes directly to local governments, empowering communities. |
The Debt Problem: A Mountain to Climb
Ghana’s debt situation is dire. The government owes a staggering amount, both at home and abroad. Here’s the breakdown:
| Debt Category | Amount | What It Means |
| Domestic Debt Service (2025-2028) | 150.3 billion (11.6% GDP) | Huge payments are due in 2027 and 2028—this is a ticking time bomb. |
| External Debt Service (2025-2028) | US$8.7 billion (10.9% GDP) | Ghana owes a lot to foreign creditors, with big payments coming up. |
| Central Government Arrears | 67.5 billion (5.2% GDP) | The government owes contractors and suppliers billions—this is choking the economy. |
| Energy Sector Arrears | US$1.73 billion (IPPs) | Unpaid bills to power producers are a major risk to the energy sector. |
| Cocoa Sector Arrears | GH¢32 billion | The cocoa sector, once a backbone of the economy, is drowning in debt. |
| Financial Sector Legacy Issues | GH¢10.45 billion | Cleaning up the financial sector will cost billions more. |
The Plan: Fiscal Discipline with a Human Face
The government is trying to do two things at once: tighten the belt and protect the vulnerable. It’s cutting wasteful spending, but it’s also investing in education, healthcare, and infrastructure. Here’s how:
- Tax Reforms: The government is scrapping unpopular taxes like the E-Levy and Betting Tax, but it’s raising taxes on mining companies. This is a smart move—it eases the burden on ordinary Ghanaians while tapping into the profits of big corporations.
- Debt Management: Ghana is reopening its domestic bond market to manage its debt better. It’s also building a “Sinking Fund” to set aside money for future debt payments. This is like saving for a rainy day—something Ghana hasn’t done enough of in the past.
- Social Protection: The budget increases funding for programs like free education, healthcare, and cash transfers to the poor. These are essential investments in human capital, and they’ll pay off in the long run.
The Risks: Can Ghana Pull This Off?
The budget is ambitious, but it’s not without risks. The biggest challenge is the debt. Ghana has to make huge payments in 2027 and 2028, and there’s not much room for error. If the government can’t grow the economy fast enough or collect enough taxes, it could face another debt crisis.
Another risk is political will. Cutting spending and raising taxes is never popular, and there’s always the temptation to backtrack. But if the government stays the course, this budget could be the start of a real economic turnaround.
The Bottom Line
Ghana’s 2025 budget is a step in the right direction. It’s not perfect, but it shows that the government is serious about fixing the economy. The key now is execution. If Ghana can stick to the plan, it could emerge stronger and more resilient. But if it falters, the consequences could be severe. As the economist Paul Krugman might say, “It’s a high-stakes gamble, but sometimes you have to take risks to get back on track.”
