President John Dramani Mahama’s 2025 budget has been presented as a strategic plan to revitalize Ghana’s economy, focusing on fiscal consolidation, youth empowerment, and social interventions.
However, a critical analysis by NPP Germany reveals significant gaps between the administration’s campaign promises and the budget’s allocations, raising concerns about the government’s commitment to its electoral pledges.
Fiscal Consolidation vs. Economic Expansion
The budget emphasizes fiscal consolidation, projecting total expenditures of GH¢269.1 billion, down from GH¢279.2 billion in 2024.
While stabilizing public finances is crucial, this approach appears to overshadow the need for economic expansion and job creation.
The administration’s commitment to improving living standards seems undermined by the limited focus on broad-based economic diversification.
Notably, the agro-processing industry, previously highlighted as a key link between agriculture and manufacturing, receives little emphasis in the budget.
Discontinuation of Industrial Initiatives
A glaring omission is the discontinuation of the One District One Factory (1D1F) initiative, a policy aimed at decentralizing industrialization and fostering rural job creation.
The absence of a clear alternative industrialization framework raises questions about the administration’s strategy to boost the manufacturing sector and reduce unemployment.
Regarding import duty charges, President Mahama had pledged during his campaign to eliminate import duties on vehicles and equipment for industrial and agricultural purposes.
However, the 2025 budget does not reflect this commitment, as it omits any reduction in import DUTY charges.
This decision contradicts the administration’s earlier promises and may adversely affect sectors reliant on imported machinery and equipment, thereby impacting industrial and agricultural productivity.
Ambiguities in Import Substitution Strategies
The budget’s approach to import substitution lacks clarity, particularly concerning refined petroleum products, which constitute a significant portion of Ghana’s imports.
The termination of the Gold-for-Oil program, despite its limited success, leaves a void in strategies to manage foreign exchange reserves and ensure energy security.
Additionally, the budget fails to address the need to safeguard access to essential industrial inputs amid rising global trade protectionism.
Underfunded Employment Initiatives
The administration’s flagship economic initiative, the 24-hour economy, lacks direct budgetary allocation, with implementation pending legislative reforms. Other employment-focused programs, such as the Women’s Development Bank (GH¢51.5 million), the National Apprenticeship Programme (GH¢300 million), and the National Coders Programme (GH¢100 million), receive minimal funding relative to the scale of Ghana’s unemployment challenge.
This disparity suggests a symbolic rather than transformative approach to job creation.
Inconsistencies in Government Expenditure
Despite promises of lean governance, the budget allocates GH¢2.7 billion for compensation at the Office of Government Machinery in 2025, a substantial increase from the GH¢327 million spent in 2024 under the previous administration.
This sharp rise contradicts the administration’s rhetoric on fiscal discipline and raises concerns about prudent financial management.
Uncertain Tax Reforms
The abolition of certain taxes, notably the Electronic Transfer Levy (E-Levy) and the betting tax, has been lauded as pro-people measures. However, retaining the COVID-19 Levy, with a promise to phase it out later in 2025, has sparked criticism.
Given the high fiscal deficit, the sustainability of these tax cuts is questionable, and there is a risk that the government may need to reintroduce taxes to cover revenue shortfalls.
In conclusion, while the 2025 budget aligns with the administration’s electoral commitments in principle, it lacks concrete measures to fulfill them.
The emphasis on fiscal consolidation may satisfy International Monetary Fund (IMF) recommendations, but the practical impact on job creation and economic relief for the electorate remains uncertain, with key policies still in their introductory stages.
Ghanaians deserve better than empty rhetoric. They deserve leadership that delivers results, and that leadership can only come from the NPP.
We Say KUDOS to Nana Addo-Dankwa Akufo-Addo and Dr. Bawumia government!!!
God Bless Our Homeland Ghana!!!
Long Live Ghana, long live the Elephant Party!!!!
Kukruduuuu Eeeessshiii!!!
Signed:
Nana Osei Boateng
NPP GERMANY
Communications Director
