Dr. Ato Forson’s mid-year budget review 2025 presented: Full story 

What We Met: A Country in Fiscal Ruins

When the new administration took office, Ghana was facing one of its gravest economic crises in decades. The challenges were immense, ranging from overwhelming debt burdens and institutional dysfunction to the collapse of public trust and investor confidence.

Massive Debt & Fiscal Risks

Ghana was in a state of near insolvency. Government arrears had hit GH¢67 billion, with reckless contract commitments totaling over GH¢194 billion. The cocoa sector owed GH¢32 billion, and the energy sector was running a $1.5 billion annual deficit.

Economic Mismanagement

A combination of corruption, unchecked spending, and poor fiscal oversight led to ballooning deficits. The Domestic Debt Exchange Programme (DDEP), intended to ease pressure, inflicted severe losses on pensioners, the middle class, and investors.

Currency Collapse & Inflation Surge

The Ghana Cedi became the world’s worst-performing currency, triggering inflation and depleting household savings. The economy was effectively in free fall.

Sectoral Collapse

Key sectors were paralyzed:

• State-owned enterprises had dysfunctional balance sheets.
• The financial sector remained fragile despite a GH¢30 billion cleanup.
• Credit ratings plunged to default status, unprecedented in Ghana’s history.

Unemployment & IMF Programme Failure

Joblessness soared, MSMEs collapsed, and the IMF programme veered off track in 2024, jeopardizing recovery efforts.

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What Government Did Differently: The Turnaround Plan

Faced with systemic failure, the new government embarked on bold and targeted reforms post-2023, grounded in discipline, transparency, and inclusivity.

Renewing the Social Contract

A series of national engagements, including the National Economic Dialogue and Education Forum, reset Ghana’s policy priorities. Civil society, youth, market women, and traditional leaders were consulted extensively.

Fiscal Discipline & IMF Endorsement

Government pursued rigorous spending controls while safeguarding social protection. The IMF praised the approach, leading to the program’s reinstatement and $370 million disbursement in July 2025.

Strategic Investments

New capital flowed into:

• Education and healthcare
• Agriculture and infrastructure
• The creation of the Ghana Gold Board (Act 1140) to stabilize forex and the Cedi.

Institutional Coordination Restored

Stronger synergy between the Finance Ministry and Bank of Ghana yielded better economic management, rebuilding trust in policy direction.

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Significant Gains Made So Far: A Nation on the Mend

By mid-2025, Ghana’s economy had turned a critical corner.

Strong Fiscal Performance

• Primary surplus of 1.1% of GDP (vs. 0.4% target)
• Fiscal deficit down to 0.7% of GDP (vs. 1.8% target)

Inflation & Interest Rates Fall

• Inflation dropped from 23.8% to 13.7% – lowest since 2021
• 91-day Treasury bill rate fell from 27.7% to 14.7%

Currency Recovery & Reserve Buildup

• Cedi appreciated 42.6% against the USD (from GH¢17.0 to GH¢10.4)
• Reserves rose to $11.12 billion, covering 4.8 months of imports

Credit Rating Upgrade

Fitch upgraded Ghana from Restricted Default to B- (Stable Outlook) in June 2025.

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Macroeconomic and Sectoral Performance (H1 2025)

Economic Growth

• GDP growth: 5.3% (highest Q1 growth since 2020)
• Non-oil GDP growth: 6.8% (fastest since 2018)

Sectoral Contributions

• Agriculture: 6.6% growth, with fishing at 16.4%
• Services: 5.9% growth, led by ICT (13.1%)
• Industry: 3.4% growth, driven by manufacturing (6.6%)

New Policies in Play

• 24-Hour Economy Policy
• Big Push Programme
• Agriculture for Economic Transformation Programme

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Inflation & Price Stability

Category	Dec 2024	June 2025	% Reduction
Consumer Inflation	23.8%	13.7%	-42.4%
Food Inflation	27.8%	16.3%	-41.4%
Producer Inflation	26.1%	5.9%	-77.4%
Imported Goods	18.0%	12.5%	-30.6%

Drivers of Disinflation

• Fiscal consolidation
• Tight monetary policy
• Increased food supply via agro-reform
• Cedi appreciation

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Interest Rate Developments

Rate Type	Dec 2024	June 2025	% Reduction
91-day T-Bill	27.7%	14.7%	-46.9%
Lending Rate	30.3%	27.0%	-10.9%

Impact: GH¢4.9 billion saved in domestic interest payments in H1 2025.

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Public Debt Reduction: A Historic First

Metric	Dec 2024	June 2025	Change
Total Debt	GH¢726.7B	GH¢613.0B	-15.6%
Debt-to-GDP	61.8%	43.8%	-18 pp
Foreign Debt Share	57.4%	49%	-14.6%

This marked Ghana’s first-ever negative debt accumulation over a 6-month period.

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Debt Restructuring & Sinking Fund Strategy

• MoU with Official Creditor Committee (OCC) approved
• Two bilateral agreements signed, four more expected by end-July
• Debt service for Eurobonds and DDEP coupons fully funded
• Sinking Fund Accounts in place to manage 2026–2028 maturities

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Payroll Audit & Public Financial Controls

• 91% payroll audit complete
• 14,000+ ghost workers identified
• GH¢150.4 million in recoveries expected
• Officials to be held personally liable for payroll fraud

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Revival of the National Investment Bank (NIB)

NIB, once nearly collapsed under the previous administration, is now stabilized:

• Capital injection of GH¢2.45 billion (cash, bonds, shares)
• Capital Adequacy Ratio rose from -53.13% to +23%
• GH¢6.4 billion in depositor funds protected
• Over 900 jobs saved
• NIB now positioned for listing on GSE with a sustainable restructuring plan

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External Sector: A Dramatic Turnaround

Indicator	June 2024	June 2025
Gross Reserves	$8.98B	$11.12B
Trade Surplus	$1.65B	$4.93B
Current Account Surplus	$283.1M	$2.97B
Capital Inflows	—	$792.1M

Gold exports (small-scale sector) more than doubled from 26.4 tonnes to 51.5 tonnes, generating nearly $5 billion.

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Key Reforms and Initiatives Ahead

VAT Reforms (Planned for 2026 Budget)

• Abolition of COVID-19 Levy
• Unified VAT rate (removing cascading effects)
• Higher registration threshold to exempt micro-businesses
• Enhanced compliance through e-taxation devices

24-Hour Economy & Volta Economic Corridor

• Year-round agriculture (Grow24)
• Agro-industrial hubs (Make24)
• Tourism development (Show24)
• Inland transport (Connect24)

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Revised Fiscal Framework (2025 Outlook)

• Real GDP growth: ≥ 4.0%
• Non-oil GDP: ≥ 4.8%
• Inflation: ≤ 11.9%
• Primary Surplus: 1.5% of GDP
• Reserves: ≥ 3 months of import cover (already exceeded)

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Conclusion: Recovery, Credibility, and Momentum

In just 200 days, Ghana has moved from the brink of collapse to a trajectory of stability, credibility, and growth. The mid-year fiscal review 2025 underscores a historic economic rebound, driven by sound reforms, discipline, and strategic leadership.

Dr. Ato Forson’s message to Parliament was clear: Ghana is back on track — but staying there requires continued commitment to reform, transparency, and prudent management.

Infrastructure

 

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1. Reclaiming Stability: The State of the Nation’s Economy

When Dr. Cassiel Ato Forson assumed office in January 2025, he inherited what he described as “an economy in deep distress”—battered fundamentals, broken systems, and a population burdened by despair. However, six months on, signs of revival are emerging.

• Growth: First-quarter GDP growth hit a five-year high.
• Debt and Inflation: Debt-to-GDP ratio is at its lowest in five years; inflation at a four-year low.
• Currency Recovery: The cedi has made a historic recovery, regaining nearly all losses from 2022 to 2024.
• Improved Credit Ratings: Ghana’s credit rating jumped two notches to B- with a stable outlook—its best position in four years.
• Prices: Fuel prices, and staple goods like sugar, rice, and cooking oil, are at four-year lows.

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2. Robust Infrastructure Development – The Big Push Programme

One of the hallmarks of the 2025 fiscal policy is an aggressive infrastructure rollout dubbed The Big Push Programme. The Ministry of Finance has greenlit a massive commitment authorization to rebuild the country’s decaying road network.

Key Road Projects Approved:

Over 5,000km of roads are being reconstructed across 166 constituencies, including:

• Bridges & Strategic Routes: New bridge over Oti River at Dambai, Accra-Kumasi Expressway (new alignment), and Adawso – Ekye Amanfrom Bridge to open up Afram Plains.
• Major Urban Roads: Kumasi and Sunyani Outer Ring Roads, Suame Interchange, Dodowa-Afienya-Dawhenya Road.
• Regional & Rural Linkages: Tumu-Hamile, Navrongo-Tumu, Techiman-Wenchi, Dodo Pepesu–Nkwanta, and the Adomi Bridge-Akwamufie corridor.
• Coastal Corridors: Dualization of Cape Coast-Takoradi Road and Winneba-Mankessim Road.

Rescuing Abandoned Projects

Projects left unfunded by previous administrations—such as the Ofankor–Nsawam Dual Carriageway, Kasoa-Winneba Road, and Have-Hohoe Road—are now back on track.

Feasibility Studies Underway:

• Accra–Kumasi Expressway (new alignment)
• Accra and Kumasi Outer Ring Roads
• Adawso – Ekye Amanfrom Bridge

New Legislation:

A Road Maintenance Trust Fund Bill will soon be presented to replace the Ghana Road Fund, ensuring sustainable financing for road upkeep.

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3. Social Investment: Support to Key Sectors

Trainee Allowances Paid in Full

All nursing and teacher trainee allowances for January–June 2025 have been fully paid. This move is seen as a boost to morale in the education and health sectors.

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4. Government Expenditure: Fiscal Transparency and Strategic Investment

In the first half of 2025, government spending totaled GH¢55.5 billion, strategically disbursed across social services, infrastructure, and debt obligations.

Major Payments Include:

• Debt & Stability:
  • US$700 million for Eurobond repayment
  • GH¢10 billion to domestic bondholders
  • GH¢2 billion to save the National Investment Bank
• Social Sector:
  • GH¢2.9 billion to District Assemblies
  • GH¢4.6 billion to the NHIS
  • GH¢895 million to School Feeding Programme
  • GH¢1 billion to Free SHS
  • GH¢369.9 million for Nursing Training Allowance
  • GH¢191.7 million for Teacher Training Allowance
• Power & Energy:
  • GH¢9.1 billion to ensure stable power supply
• Health:
  • GH¢1.4 billion for NHIS claims
  • GH¢252 million for essential medicines
• Education & Youth Development:
  • GH¢72.8 million Capitation Grant
  • GH¢122.8 million for BECE registration
  • GH¢34.5 million for Adwumawura Programme (youth employment)
• Other Initiatives:
  • GH¢477 million to LEAP beneficiaries
  • GH¢25 million for Assembly Members
  • GH¢21 million for the National Apprenticeship Programme

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5. Restoring Confidence: Fiscal Discipline and Debt Management

The Minister highlighted efforts to:

• Rein in interest rates through effective policy
• Implement prudent debt management to reduce domestic interest payments
• Restore fiscal discipline through transparency and accountability

These strategies have already led to reduced borrowing costs and increased investor confidence.

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6. Future Outlook: Growth Through Strategic Programmes

The government’s growth strategy is anchored on three pillars:

• 24-Hour Economy Initiative – creating round-the-clock employment and productivity.
• Big Push Infrastructure Programme – transforming roads and connectivity.
• Agriculture for Economic Transformation Programme – boosting food security and exports.

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7. Symbol of Sovereignty: The Endurance of the Cedi

Dr. Forson closed with a poignant reflection on Ghana’s currency:

“For 60 years, through cycles of inflation, devaluation, redenomination, and recovery, the cedi has remained the symbol of our sovereignty. It has endured. It has evolved. It remains the only legal tender of our Republic.”

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Conclusion: A Nation on the Mend

The 2025 Mid-Year Fiscal Policy Review paints a picture of a nation slowly but deliberately reclaiming economic stability. Through bold infrastructure investment, social equity, and responsible fiscal management, Ghana is entering a new era of growth, anchored in discipline and vision.

Also read the full Mid-year fiscal policy review 2025 presented by Dr. Cassiel Ato Forson at Parliament, Accra:

MidYear Fiscal Policy Review 2025w