Ghana’s 2025 Budget presents a strategic roadmap for economic recovery, fiscal consolidation, and structural transformation.
With projections grounded in the government’s Budget Statement and Economic Policy, PwC’s 2025 Budget Digest provides a comprehensive economic indicators, revenue expectations, and expenditure allocations.
The report by PWC indicated that, the government forecasts a real GDP growth of 4.0% in 2025, an improvement from the estimated 2.8% growth in 2024, saying that this aligned with an expected moderate global economic recovery, particularly in emerging markets and Sub-Saharan Africa.
Aggregating from sector-wise, it said the agriculture sector is projected to grow at 4.8%, while industry and services are expected to expand by 3.8% each. These projections indicated optimism, but given Ghana’s historical deviations from budget targets, actual growth remained uncertain.
Further, it said inflation is expected to decline to 11.9% in 2025, down from 23.1% in February 2025. If realized, this would ease cost-of-living pressures, especially for businesses and consumers dealing with currency depreciation and high lending rates.
In debt sustainability, it said Ghana’s public debt remained a critical concern, with total debt standing at GH¢416.8 billion in 2024. The external debt component has reached GH¢206.2 billion, while domestic debt has climbed to GH¢309.9 billion. Despite some efforts to restructure debt, the public debt-to-GDP ratio is projected at 57%, reflecting Ghana’s ongoing fiscal challenges.
The fiscal deficit is expected to reduce to 3.1% of GDP in 2025, from an estimated 4.2% in 2024. While this indicated improved fiscal discipline, concerns persist over Ghana’s ability to meet this target due to past fiscal conditions.
However, the report says the 2025 budget projects a 21% increase in total revenue, reaching GH¢224.9 billion. It said some of the revenue sources included, taxes on income and property which is GH¢97.8 billion (43.5%), taxes on domestic goods and services which is GH¢73.8 billion (32.8%) also international trade taxes, projected at GH¢26 billion (11.6%).
PWC said several tax reforms has been introduced to improve revenue collection, including abolishing the E-Levy, removing VAT on motor vehicle insurance premiums, and eliminating the 10% tax on lottery winnings. Additionally, it said the government planned to increase tax exemptions efficiency and digitize tax collection.
It said government spending is set to rise by 19% to GH¢268.8 billion in 2025 from employee compensation of GH¢76.6 billion, interest payments of GH¢64.2 billion, grants to other government units which is GH¢54.5 billion, and capital expenditure of GH¢32.9 billion.
While government spending on social benefits is increasing significantly (339.3% jump to GH¢3.2 billion), spending on goods and services is being cut by 39.4%, raising concerns about service delivery quality.
Nonetheless, interest rates remained high, with the Bank of Ghana’s policy rate at 30.3% as of February 2025. Treasury bill rates and lending rates have shown some decline, but businesses still face high borrowing costs.
Ghana’s gross international reserves remain a key concern, with coverage just above three months of import cover. The government aims to stabilize reserves to avoid further cedi depreciation.
The 2025 budget signals fiscal discipline, tax reliefs, and economic recovery efforts, but challenges remain. Key concerns include public debt levels, actual revenue collection, and expenditure efficiency.
Importantly, the effectiveness of tax administration reforms and government’s ability to implement spending controls will determine Ghana’s economic trajectory in 2025.
