2025 Budget will be one of Ghana’s most credible — Finance Minister fires at NPP over debt and galamsey growth

Budget Credibility and Economic Reforms

In his recent budget presentation, Dr. Forson emphasized that the 2025 fiscal plan is among the most credible in Ghana's history. He outlined a series of economic reforms aimed at revitalizing the economy, which has been under strain due to significant debt and challenges in sectors like cocoa and energy. The Minister announced the implementation of "shock therapy" measures, including the removal of poorly designed taxes and targeted revenue generation strategies, to improve the fiscal deficit and enhance the nation's economic credibility. These initiatives aim for a Gross Domestic Product (GDP) growth of at least 4% and an inflation rate of 11.9% by the end of the year. 

Criticisms from the NPP

The NPP has raised concerns about the budget's projections, labeling them as unrealistic and lacking credibility. Former Finance Minister Dr. Mohammed Amin Adam cautioned that the government's borrowing trends could reverse the gains made in debt reduction, urging the International Monetary Fund (IMF) to scrutinize the fiscal balances outlined in the budget. 

Addressing Debt and Galamsey Issues

Dr. Forson criticized the previous NPP administration for contributing to the nation's debt accumulation and the rise of galamsey activities. He highlighted that the current government is committed to tackling these issues head-on, implementing stringent measures to curb illegal mining and adopting fiscal policies aimed at reducing the debt-to-GDP ratio. The Minister acknowledged the significant external debt payments of $8.7 billion over the next four years and emphasized the government's commitment to completing debt restructuring and auditing arrears as part of the IMF program conditions. 

Public and Political Reactions

The budget has elicited mixed reactions from various stakeholders. While some financial analysts have warned against potential pitfalls, such as the collapse of the Minerals Income Investment Fund (MIIF), others have questioned the credibility of the fiscal data presented. The Minority in Parliament has urged the IMF to scrutinize the 2025 budget, expressing concerns over the government's borrowing trends and fiscal projections. 

Conclusion

The 2025 budget represents a pivotal moment for Ghana as it seeks to restore economic stability and growth. The government's commitment to implementing credible fiscal policies and addressing longstanding issues like debt accumulation and illegal mining is central to this effort. However, the divergent views among political parties and analysts underscore the challenges ahead in achieving these economic objectives.