Ghana’s economic recovery momentum appears to be gathering pace, with the government expected to surpass all its macroeconomic targets for 2025, according to the latest analysis by IC Research, an economic and financial research institution.
In its review of the 2025 Mid-Year Budget Review, IC Research noted that key macroeconomic indicators recorded impressive gains in the first half of the year including inflation, interest rates, exchange rate stability, GDP growth, and gross international reserves setting a positive tone for the remainder of the fiscal year.
“The budget execution for half-year 2025 delivered strong performances with a sizable fiscal adjustment outperforming the authorities’ target and our estimates for the period,” the report stated, citing renewed commitment to spending control, the non-accumulation of arrears, and a largely satisfactory tax revenue outturn as major contributors.
Despite lingering fiscal risks, the research firm expressed confidence in the government’s ability to meet its end-of-year goals.
“Against the backdrop of better-than-expected fiscal outturn, the authorities appear strongly optimistic about achieving the end-2025 macro-fiscal targets as all the year-end targets were retained,” it added.
Revenue Outturn: Tax Efforts Shine, Non-Tax Disappoints
Although the total revenue and grants outturn for the first half of 2025 GH¢99.3 billion, equivalent to 7.1% of GDP fell short of the government’s target by 3.2%, it exceeded IC Research’s expectations by 8.3%. This was largely attributed to intensified tax compliance efforts amid limited new revenue measures.
The report, however, flagged a disappointing performance in non-tax revenue, which recorded GH¢10.2 billion, falling short of target by GH¢2.4 billion or 19.1%. The underperformance was primarily due to lower-than-expected collections by state-owned enterprises and government agencies.
Customs revenue also disappointed, with collections totaling GH¢10.96 billion GH¢1.6 billion or 12.7% below target. IC Research blamed “systemic revenue leakages at key ports, especially the Tema Port,” and the persistent smuggling of goods across Ghana’s porous land borders for the shortfall.
“Unsurprisingly, the authorities flagged this revenue source as one of the likely headwinds to budget performance, outlining measures to limit the risk,” the report noted.
Commitment to Fiscal Prudence
According to IC Research, the government’s strong fiscal stance and transparency around the risks and mitigation strategies are notable positives in the 2025 budget execution.
“Our review of the fiscal data indicates renewed commitment to spending controls and non-accumulation of arrears amid a largely satisfactory tax revenue outturn, despite underperformance in non-tax revenue,” the firm said.
While cautioning that external shocks and domestic inefficiencies still pose potential threats to full-year budget performance, IC Research acknowledged that some of the mitigation measures outlined in the Mid-Year Review such as tighter revenue enforcement and improved public financial management are “credible mitigants.”
The report also highlighted the promising performance of the Energy Sector Levies Act (ESLA), which is expected to remain a bright spot in the second half of 2025, supporting energy-related fiscal obligations.
Outlook: Cautious Optimism
As Ghana works through its International Monetary Fund (IMF) programme and debt restructuring plans, IC Research’s findings offer a note of cautious optimism for investors, lenders, and policymakers.
The mid-year numbers suggest that Ghana may be turning the corner on some of its longstanding macroeconomic challenges provided the government sustains its current fiscal discipline and successfully plugs revenue leakages.
Still, the research outfit urged vigilance. “The strong half-year 2025 delivery on key targets has significantly eased the post-2024 concerns on the near-term fiscal outlook, although risks to budget execution persist.”
With global economic conditions still fluid and domestic vulnerabilities ever-present, Ghana’s path to full recovery will depend on consistent implementation and policy credibility throughout the remainder of the fiscal year.
