Finance Minister Dr. Cassiel Ato Forson has hinted that the 2025 budget will introduce sweeping cost-cutting measures to stabilize Ghana’s economy, reduce wasteful spending, and ensure fiscal discipline.
Speaking in a live X (formerly Twitter) Spaces session hosted by social media influencer Kalyjay, Dr. Forson revealed that the country is still facing economic challenges and that restoring stability is the government’s primary focus.
“Let us not deceive ourselves that the country is out of the woods yet. The economy is still in distress, and the first thing we need to do is to take measures to bring us back to the stability we deserve,” he stated.
Dr. Forson disclosed that the government has already cut back on borrowing from the treasury market, leading to a significant drop in interest rates.
“Today, banks find it easier to lend to government than to engage the private sector because obviously, government is easier and they’ll pay high rates,” he said. “But in the last two months, you have seen a reduction of government activity in the treasury market. Week in, week out, we reject some bids—sometimes up to 10 billion cedis.”
According to him, this move will push banks to redirect lending to the private sector, which has long suffered from limited access to credit due to excessive government borrowing.
“The time will come when these banks, after seeing consistent rejection of their bids, will have no choice but to lend to the private sector. That is where we are going,” he assured.
While government borrowing is being reduced, Dr. Forson stated that revenue mobilization remains a priority, though without imposing major new taxes. Instead, the focus will be on improving tax compliance and rationalizing levies.
“There was a question about how we intend to replace those revenues from the taxes that we are removing or the revenues we are losing. Yes, again, we will address that as part of the budget,” he said.
The finance minister disclosed that the government is reviewing port levies and import taxes to eliminate redundant charges and reduce the cost of doing business. He also hinted at adjustments to the Energy Sector Levies Act (ESLA) as part of efforts to optimize revenue collection and manage energy sector debt.
“We have begun the process to rationalize all the taxes at the port. Some of these levies do not come straight to the central government. We need to identify who benefits from these levies and for what purpose. If there is a need to remove them, we will,” he explained.
Dr. Forson disclosed that Ghana has resumed servicing its debts, including Eurobond repayments.
“In the past two years, the government of Ghana was not servicing some debts, particularly the Eurobond. But we have just resumed debt servicing, so you will see an increase in debt service obligations,” he revealed.
He however assured that primary spending will be reduced to prevent excessive expenditure while maintaining fiscal discipline.
“You will see a significant drop in primary expenditures because what we are seeking to do is go through a very strong fiscal consolidation,” he emphasized.
Dr. Forson assured that the budget would reflect a credible fiscal policy, ensuring that funds allocated are realistically disbursed and effectively managed.
“If you prepare a budget, you should prepare a budget that we intend to execute. If you prepare a budget with wrong assumptions and don’t ensure that what you budgeted for is implemented properly, then it becomes a problem,” he said.
He promised that the Mahama administration will enforce credible budgeting, ensuring that allocated funds are released and used as intended.
The full details of the government’s cost-cutting strategy, revenue measures, and spending allocations are expected to be outlined when the 2025 budget is presented to Parliament, tomorrow Tuesday, March 11, at 10 a.m.