Ghana’s mid-year budget review is unlikely to introduce major policy changes as the Government remains committed to fiscal consolidation, Professor Godfred Alufar Bokpin, an economist, has said.
He said the Finance Minister’s presentation was expected to focus on revenue performance, expenditure execution and the implementation of reforms under the International Monetary Fund’s (IMF) Policy Coordination Instrument (PCI), rather than any change in the country’s fiscal strategy.
Prof. Bokpin, a lecturer at the University of Ghana Business School (UGBS), said this in an interview with the media ahead of Thursday’s presentation of the 2025 Mid-Year Budget Review.
He explained that the Government had already signalled its intention to maintain fiscal discipline throughout 2025 and 2026 before gradually easing expenditure from 2027, making any significant policy shift unlikely.
“The government already signalled markets and the public that it would pursue austerity for about two years, spanning 2025 and 2026, before progressively easing spending from 2027,” he said.
The mid-year budget review, presented under Section 28 of the Public Financial Management Act, 2016 (Act 921), provides updates on revenue and expenditure performance, implementation of government policies and programmes, and revisions to macroeconomic assumptions where necessary.
Prof. Bokpin said the review should also provide progress updates on nearly 20 reforms being implemented under the IMF’s PCI ahead of the Fund’s Executive Board meeting later this month to assess Ghana’s programme.
He noted that although inflation had fallen below the Government’s 2025 target, the authorities had maintained their original macroeconomic projections, suggesting that the fiscal consolidation framework would remain intact.
On revenue mobilisation, Prof. Bokpin urged the Finance Minister to update Parliament on the performance of recent tax measures, including the harmonisation of the flat Value Added Tax (VAT) rate with the standard 20 percent rate, as well as administrative and compliance reforms aimed at improving tax collection.
He also identified first-quarter budget execution, which he estimated at about 70 percent, as a key indicator of the Government’s spending outlook for the second half of the year.
Prof. Bokpin stressed the need for the Government to demonstrate ownership of the PCI reforms by outlining measures that would sustain recent macroeconomic gains beyond the IMF-supported programme.
“Stability is not an end but a foundation. From stability, the country must build resilience, and from resilience move toward structural and productivity transformation, a process that will take time,” he said.
He observed that Ghana’s Medium-Term Revenue Strategy, anchored on the National Revenue Policy, indicated that IMF-backed reforms had yet to significantly improve domestic revenue mobilisation.
Although the strategy targets a tax-to-GDP ratio of between 18 and 20 percent by 2028, Ghana’s current ratio remains around 14 percent, highlighting the challenge of generating enough domestic revenue to reduce reliance on external financing, he said.
Prof. Bokpin said the persistent revenue gap meant Ghana could not yet claim to have outgrown external financial support, despite the buffer provided by the Bank of Ghana’s gold-backed foreign exchange reserves.
He recommended that the Government complement the PCI by accessing the IMF’s Resilience and Sustainability Facility (RSF), a concessional financing mechanism already utilised by several African countries, including Kenya.
“Signing on to the PCI without funding attached simply moves the country from the emergency ward to the recovery ward of IMF support, not fully out of it. The government must secure the Board’s backing and pursue concessional climate financing without delay,” he said.
Prof. Bokpin said the RSF would provide Ghana with dedicated financing to tackle coastal erosion and other climate-related risks.
He noted that recent flooding highlighted the country’s growing climate vulnerabilities and underscored the need for sustained investment in climate resilience.
Prof. Bokpin urged the Government to prioritise climate and revenue reforms in the mid-year budget review, warning that delays would increase the long-term cost of addressing those challenges.
