Full Text: Minority Caucus Reacts to 2025 Budget

The Minority in Parliament has responded to the 2025 Budget Statement and Economic Policy, which was presented by Finance Minister Dr. Cassiel Ato Forson on March 11.

Addressing a press conference on Thursday, March 13, 2025, former Finance Minister and Karaga MP, Dr. Mohammed Amin Adam, criticized Dr. Forson, alleging that he manipulated figures to depict a deteriorated economic situation inherited by the current government.

Read full statement below:

NPP MINORITY PRESS CONFERENCE ON 2025 BUDGET STATEMENT- PARLIAMENT HOUSE

1. Let me begin by expressing our gratitude to you for your support in disseminating our message to the Ghanaian people. You continue to be our great partners in our quest to deepen our democratic dispensation.
2. You will recall that days before the Budget presentation to Parliament by the Hon. Minister for Finance, Hon. Casiel Ato Forson, who did the presentation on behalf of His Excellency President Mahama, we hinted at clandestine plans by the Government to manipulate fiscal data to support their baseless claims of inheriting a badly managed economy from the previous NPP Government. This carefully crafted strategy has been pursued right from the President himself during his message on the state of the Nation and repeated at the National Economic Dialogue. The 2025 Budget was, however, going to be the vehicle for confirming what has been perfectly rehearsed to crown the narrative by putting data to the unfounded claims. We have been vindicated. Our intelligence has been confirmed, and the Minister has done the hatched job.

3. The government through the 2025 Budget Statement has churned out fiscal deficit on commitment basis of 7.6% of GDP and a primary deficit of 3.6% of GDP. This would imply that the NPP administration mismanaged the fiscals in accord with the intentions of the NDC government. In fact, an economy with such strong revenue performance and expenditure management as we have seen from the data in the budget cannot produce the kind of elevated fiscal outturns the Minister announced; and this should prick every Ghanaian as this 2025 Budget brings our fiscal data into credibility crisis.
4. But colleagues, this is where it gets interesting, they have erroneously churned out wrong data in a bid to tarnish the image of the NPP administration by including GHs49.2 billion in expenditure claims without any basis.
5. Before the start of the IMF program in 2023, we had agreed with the IMF to set the fiscal anchor based on which we would monitor the IMF program and this were the fiscal balances on commitment basis (i.e. primary balance and overall fiscal balance). It was in a bid to have a real time view on arrears accumulation. So, we ring-fenced commitments that had gone through the GIFMIS system then and were awaiting payment. These commitments were termed outstanding expenditure claims. Thus, if you look at the 2022 budget outturn, you will see this concept in there. Per the IMF program, we then agreed to monitor the evolution of these claims vis-à-vis their net build-up. The reason for this approach is that Ghana is a developing nation with developmental needs and so, it was going to be unrealistic in the context of the program to not have new commitments, but the plan was to ensure that, on net terms, the build-up remained almost neutral to avoid a significant build-up in arrears which also hurts the economy.
6. Also, it is important to note that, if we look at the Arrears Clearance Strategy prepared by the Ministry of Finance and submitted to the IMF in 2023 in fulfilment of the end-September 2023 Structural Benchmark, the amount in expenditure claims which we described as arrears was GHs47.5 billion. This amount, after an ageing profile analysis, had payments outstanding from around 2012/2013.
7. While we do not doubt the possibility of accumulating some arrears between end-2022 and end-2024 given our own peculiar liquidity constraints, including outstanding expenditure claims gathered from MDAs, we are very surprised that this was done without first, undertaking the correct verification or audit of the numbers (which the Minister himself alluded to in his speech in paragraph 135 under 2025 expenditure measures as something he now intends to do). Therefore, just lifting a certain stock of expenditure claims of GHs49.2 billion and inserting it into the fiscal framework to create an impression as though all those claims were generated in 2024, is not just including expenditures that are alien to the fiscal framework, but also shows a clear lack of understanding of the mechanics of the fiscal framework which is quite surprising.

9. We must also note that our fiscal framework focuses on central government operations. Therefore, claims which have not been properly audited can introduce many elements of general government which is what we think has happened. A classic example is the Controller and Accountant General final accounts which is one of the sources of information for the fiscal framework but is based on General Government Accounting. If you take the information from it on the face value and plug it into the fiscal framework, you will be reporting on two very distinct items and so, what we usually do is to work through the numbers and pick the central government expenditures only. This can only be done through verifications and auditing.
10. It is curious how the Finance Minister will come to Parliament with a budget and say that the fiscal deficit and primary deficits on commitment were derived using a certain data on claims, which he is yet to audit. Yet he has announced results derived from the data to the effect that the economy is bad. It is too elementary to know that when you have not audited your figures, you cannot use them for an important work like the national budget; otherwise, you create credibility problems for the conclusions of the budget as the Hon. Ato Forson has just done.
11. The technical people at the Ministry are professionals and I don’t know if he refused their advice. What I know is that we have gone through 3 successful IMF reviews and the technical people never told me that we needed to compile claims from several years and include in the fiscal framework as if they were accumulated in 2024. This could not be done because the IMF Technical Memorandum defines how to derive the primary balance:

“The program’s primary fiscal balance is cumulative from the beginning of the fiscal year and is measured as the difference between the primary balance on cash basis from the financing side and of the net change in the stock of payables (“outstanding payments”) of the central government reported in GIFMIS, including payables of statutory/earmarked funds (SFs) defined as outstanding payments from the consolidated funds to the SFs, and of the energy sector, defined as the difference between the total fixed cost bills received by ECG from IPPs and fuel suppliers and the payment made by ECG and the Government of Ghana including exchange adjustment and Natural Gas Clearinghouse credit notes”

12. What the government has put together as “unreleased claims” of GHs49.2 billion cannot fit into this definition because they are not reported in the GIFMIS. Also, whilst the technical memorandum provides that the payables must be “cumulative from the beginning of the fiscal year”, those claims are multi-year claims. They are also not related to Statutory Funds and energy payments. The government must therefore explain how they came by the methodology used in computing the fiscal balances. I am really lost as to how they derived the fiscal balances without fully applying the methodology agreed with the IMF in the technical memorandum.

IMF Program

13. What is even more concerning is the Minister proudly declaring to the World based on the voodoo computations he has done; that his country has breached the IMF program when the evidence is to the contrary and when the IMF itself is yet to conduct a review of program implementation in April, 2025. How can the Minister of Finance publicly wish his country derailing an IMF program even before the IMF conducts a review? Yet the same Minister in this very budget projected to foreign financing for this budget for the year to include $720 million from IMF and $600 million from World Bank.
14. How come the government doesn’t know that when Ghana fails a review because of his manipulated numbers, they will not receive the $1.3 billion from the IMF and the World Bank? Do they know that all the reliefs we got from our debt restructuring – almost $4 billion of outright debt cancellation and another $7.5 billion in debt service relief – will all revert to the status quo before the debt restructuring exercise? Do they even know that when all these happen, Ghana will be brought back to unsustainable debt levels and occasion an economic crisis? How will they fund the programs outlined in the budget? How about investor credibility?
15. On the 2025 fiscal framework, another baseless revelation in the budget is the projection of a sudden reduction in the commitment primary deficit from 3.9% of GDP in 2024 to a sudden primary surplus of 1.5% of GDP in 2025. I wish it were that simple to adjust by 5.4 percentage points between one year. This renders the 2025 Budget as not credible and requiring serious scrutiny by the IMF and the Ghanaian people.
16. We, the Mighty Minority would like to call on the IMF to speak to this in the spirit of transparency which is one of the cardinal values of the Fund. This should be done as a matter of urgency before much damage is done to our country’s economy.

Debt Management

17. Already, the government has announced it is returning to the bond market yet could not even acknowledge the enhanced debt environment created by the previous NPP government for bringing Ghana’s debts to an accelerated sustainable path where our debt to GDP ended 2024 with 61.8%, lower than the pre-COVID-19 level of 65.7% in 2019. This compares favorably with the NDC’s debt to GDP of 73% in 2016 which was later revised as a result of the rebasing of GDP in 2018.
18. It is surprising nevertheless that notwithstanding the improvement in the debt environment, the timing of the announcement to open the bond market coincided with the announcement of the elevated fiscal deficits, a condition that exposes the country to high risk of borrowing from the markets. The effects of these unfortunate data manipulation are already hitting our economy. The government must know that just by presenting such erroneous data to score cheap political points, Ghana’s sovereign bond spreads are widening again nearing 700bps when almost 3 months ago, this had declined to the 500s and was heading downwards. Why do we want to destroy the gains which we have made through such cheap politics?
19. Also, Bloomberg reported last Tuesday 11^th March, the very day the Budget was presented to Parliament, that Ghana’s Dollar sovereign bonds were among bottom performers in emerging markets after the Minister for Finance said the country missed a primary budget balance target of 2024. Dollar bonds due 2035 declined 1.8% to 70.91 cents on the Dollar. Notes maturing in 2029 fell 1% to 86.965 cents on the Dollar. International markets have not reacted kindly to the budget demonstrating their lack of confidence in the government’s economic policy direction.
20. So, you see if you cook figures to create a narrative to run your country down, international investors will show you where power lies.
21. Sadly, if you took out the GHs49.2 billion introduced in the fiscal framework the overall fiscal deficit would be 3.4% and not the 7.6% announced by the Minister; whilst the primary balance on commitment would be a surplus of 0.6% and not the 3.1% the Minister churned out. Indeed, both the overall deficit and the primary balance would be better than the targets in the 2024 budget as well as the IMF targets for the next IMF Review to be conducted in April, 2025. Sorry to say, the government didn’t want this good narrative to signify the prudent performance of the economy under the NPP. I am wondering how well the international markets would have responded to the Budget if an accurate picture was put out. Ghana is the loser. A big opportunity missed because of unhealthy politics.
22. The reaction of the international markets will even be worse than this, in the event that the IMF Review fails because of the manipulated data used by the government. In good conscience, we believe that the IMF will be fair to the Ghanaian people by holding on to the agreed method of computing fiscal data during the Review, as they did in all the previous Reviews. Other than this, the Ghanaian people stand to suffer and not the politicians, from these obviously bad political decisions.
23. The Ghanaian people can recall that in the past, Ghana was fined $39 million for misreporting economic data to the IMF due to wrong data submitted by the NDC government led by President Rawlings. It appears we are on our way there under another NDC government. We wish to advise the Minister to tread cautiously in order not to derail our march to sustainable debt levels.
24. Ladies and gentlemen, as you know, the manipulation of the fiscal data notwithstanding, the strong health of the economy the NPP handed to the new NDC government continues to be vindicated by other economic indicators.
25. The Debt-to-GDP ratio of 61.8% achieved in 2024 was not by accident. It was due to skilled negotiations and the implementation of a good debt strategy. The Hon. Minister could not even acknowledge this important development by the imminent absence of this ratio in his budget speech. Sad! Whether we like it or not, it is historic, and history indeed will be kind to the Nana Akufo-Addo Government.

Growth Rate

26. Another good news for Ghana was the announcement of a real GDP growth rate of 5.7% for the 2024 fiscal year by the Ghana Statistical Service. This is the highest in five years. But the recovery from the global crises had begun in 2023, when GDP growth surpassed 1.5% to end the year at 3.1%. The 5.7% growth in 2024 was more than the budget target of 3.1% and the revised target of 4%. This growth was led by industry for the first time in many years with a growth of 7.1%, followed by services at 5.9% and agriculture at 2.8%. This means that the Ghanaian economy has entered the phase of structural transformation, another historic development.
27. Again, the Minister tried to downplay this major achievement by attributing this growth to mining which grew at 9.4%. However, what his own budget data is telling him is that the construction sub-sector grew by 9.6% higher than mining; and for the first time in many years, manufacturing also grew by 3.9%. In the services sector, we saw a notable growth of 15.8% in information and communications largely due to the digitalization agenda implemented by Dr. Mahamudu Bawumia.
28. Certainly, our economic growth story shows that growth was not a jobless growth and that was why up to 2.3 million Ghanaians got employed under the NPP government. Unfortunately for the NDC, their growth strategy produced lower growth throughout President Mahama’s first term and in particular producing 4% growth in 2015 and 3.4% in 2016. Curiously, with all the promises this 2025 budget seeks to implement, this government is projecting to achieve 4.4% growth. How could a reset economy slow growth, following a strong growth of 5.7% by a criminally mismanaged economy in the words of the President?
29. It is intriguing that the Government decided to project a lower growth of 4% for 2025 despite the talk about their “Big Push Infrastructure Programme” costing GHs13.8 bn. We encourage them and the IMF to relook at the real GDP growth projections again, especially mining and quarrying data as this gives the impression as though they have set a lower target to enable them easily to outperform and base the performance on their own government policies. They must be transparent with their growth projections.
30. It must also be noted that despite the hype about the 24-Hour Economy Initiative by the government, it does not promise to deliver accelerated growth in the economy as industry performance is not promising. The budget estimates that projected growth rates for industry averages 5% between 2025-2027, compared with Industry growth of 7.1% in 2024. What is the benefit of the 24-Hour Economy if industry doesn’t reach the heights of the previous NPP government?

External Sector

31. Still on our record performance, not only were the trade balances brought from deficits under President Mahama’s first term to surpluses under Akufo-Addo/Bawumia government, but our capacity to withstand shocks and other external vulnerabilities improved significantly with a record Gross International Reserves of $8.9 billion, the equivalent of 4 months of import cover. This compares better against the reset economy’s projected Gross International Reserves of 3 months of import cover.

Fiscal Sector

32. It is interesting that the Minister, in highlighting his fiscal policy strategy for 2025, uses phrases such as “it is crucial that we establish macroeconomic stability and debt sustainability”. A few months ago, the IMF concluded its 3rd programme review of the ECF. Let me quote just a section of the staff report:

“Ghana’s policy and reform efforts under the IMF-supported program have continued to deliver encouraging results. Following acute economic and financial pressures in 2022, the Fund-supported program has provided a credible anchor for the government to adjust macroeconomic policies and launch comprehensive reforms to restore macroeconomic stability and debt sustainability, while laying the foundations for higher and more inclusive growth. These efforts are paying off, with growth recovering rapidly, inflation declining, although at a slower pace, and the fiscal and external positions further improving. The medium-term outlook remains favorable but subject to downside risks, including those stemming from the elections and the challenges in the energy sector”.

33. We have laid a solid foundation for this government to operate and so it is very disingenuous for them to create an impression as though we have bequeathed an economy full of problems.

2025 Revenues

34. In 2025, the real growth of total revenue and grants is just about 0.2 percentage points of GDP (i.e. from 15.9% of GDP in 2024 to 16.1% of GDP). Which is from GHs186 bn to GHs224 bn. This growth in real terms is not encouraging. But the Minister disingenuously stated in the budget speech a projection of 17.4% of GDP. This is the minister saying something different from his own budget. This further raises credibility issues.

2025 Expenditures

35. Given the hype about the government’s 24hr economy, the 2025 Budget failed to even provide basic details of the program to the taxpayer. There is no programme in the budget on that. In fact, the minister said he will soon launch the policy. There is no money voted for it in the budget. So Ghanaians will have to wait until 2026 if we are lucky then we can have hope of seeing how this main campaign slogan can translate into jobs. The NDC campaigned on the 24 hour economy and yet they are in no hurry to deliver on it. In contradistinction, the NPP campaigned on free SHS and it was delivered in Akufo-Addo’s first budget of 20217. This is worrisome particularly when it has huge fiscal implications on the wage bill and goods and services. Yet, expenditure projections have been magically cut for goods and services and no provision made to accommodate its impact on the wage bill. This makes us very weary and skeptical about the credibility of the 2025 budget numbers.
36. The expenditure measures of uncapping transfers to some statutory funds to enable them to fund other government programmes is no brainer. Every government has at its discretion how to fund its programmes. While we capped the transfers to the statutory funds and used the capped funds to fund Free SHS and other programmes, this NDC government has decided to uncap transfers to the GETFUND so that GETFUND will fund Free SHS. How on earth is this brilliant? Also, by virtue of the debt restructuring, the government absorbed the GETFUND debt and so this is not new. So is the allocation of ABFA to their Big Push CAPEX budget. If this is how they want to spend ABFA, they are at liberty to do so once they amend the PRMA or the necessary Acts. The point here is that these measures are not new and it’s the government’s funding style.
37. Per the earmarked funds capping and realignment Act, it is ok for the Minister to exercise discretion with which SFs he/she decides to restore capped funds to. We did it for NHIS when they had a huge backlog of claims from before 2016. Also, part of the capped funds to the GETFUND was restored at some point. With the increase in capitation grant and LEAP, especially, the government had no choice under the IMF programme as we had developed a strategy paper on LEAP indexation as part of the IMF programme to protect the poor and vulnerable who were going to be affected by the fiscal consolidation from the programme. In this strategy, we had a phased increase in LEAP transfers to ensure that beneficiaries were not worse off following COVID and the rise in inflation. In fact, all the other social transfers like school feeding, capitation grant and NHIS aside from LEAP were expected to increase as part of the IMF programme.
38. The measures outlined to enable the private sector such as, Support for Women Entrepreneurs, Agriculture for Economic Transformation Agenda (AETA), Rapid Industrialization for Jobs Initiative, among others, are all centered heavily on government without stating specifics on empowering the private sector to take up the responsibility of pursuing infrastructure projects and other key developmental projects. The Budget failed to provide the mechanics of the policies, making it sound as though it was another reading of the NDCs manifesto.
39. These heavy expansionary policies signal that there is fiscal stress ahead of us, another reason that could explain the widening of Ghana’s bond spreads as investors do not trust the budget’s credibility. The 2025 budget is ambitious with plans to ‘reset’ Ghana’s economy. But the real test lies in its execution, and we will all be watching.

Ghana’s Debt

40. The discourse surrounding Ghana’s debt profile from 2009 to 2024 is both multifaceted and pivotal. Following the attainment of the HIPC completion and external debt relief, Ghana witnessed a remarkable decline in our public debt to GDP ratio. However, the public debt which stood at $8.07 billion in 2008 surged to $29.2 billion by 2016, marking a more than threefold increase. Cumulatively, this represents a growth rate, or an increase of about 261.83% in the total public debt stock. This rate of change indicates that on average, the NDC government added 32.75% debt to Ghana’s debt stock every year between 2009 to 2016.
41. Contrary to public perception, the public debt which stood at $29.2 billion in 2016 has increased to $52.3 billion as at the end of 2023 and to $49.3 billion following the debt restructuring programme. This marks a little over one and half increase in the overall public debt stock under the NPP. This represents an increase of about 68.83% in the total public debt stock.
42. Unlike the trajectory between 2009 to 2016, the NPP on average, has added about 8.6% to Ghana’s debt stock every year between 2017 to date. A rate far lower than the 32.75% witnessed under the NDC. This rate, significantly lower than the NDC administration, suggests superior economic management by the NPP, even amidst global economic challenges.
43. Furthermore, Examination of the role of Eurobonds as a primary avenue for government borrowing, shows that the high coupon rates, exemplified by the 10.75% rate in 2015 under the NDC, have imposed considerable financial strains on Ghana’s economic stability.
44. In October 2007, Ghana introduced its first Eurobond valued at $750 million, with a 10-year term and an 8.5% coupon rate. Subsequently, from 2013 to 2016, a total of four Eurobonds were issued, with one being issued each year during this period. In August 2013, a Eurobond totalling $1 billion was issued with a 7.875% coupon rate and a 10-year term. This issuance was executed as a component of a strategy aimed at decreasing debt-servicing expenses in Ghana (IMF, 2013). Subsequently, in September 2014, an additional issuance of $1 billion occurred. The bond carried a yield of 8.125% and featured a flexible repayment schedule spanning three years, from 2014 to 2016 (Ghana Economic Update, 2014).
45. What is intriguing to note here is that although the issuance was deemed successful, the interest rate surpassed the average for Sub-Saharan Africa during that period (IMF, April 2015). Consequently, due to these Eurobonds, total interest payments on loans, which stood at 3.2% of GDP in 2012, surged to 6% in 2014 (World Bank PBG, 2015).
46. In October 2015, Ghana once more issued a Eurobond, this time amounting to $1 billion, featuring a coupon rate of 10.75% and a final maturity of 15 years. The 10.75 percent coupon paid by the government in 2015 is recognized as the highest among any African country from 2007 to 2020 in the Eurobond market. This coupon rate of over 10 percent was even after a world bank IDA policy-based guarantee, an indication that the economy was so bad that even with MIGA guarantee, Ghana attracted the highest coupon rate of any African country issuing bonds.
47. What is more intriguing here is that the NPP government upon assuming office in 2017 had to pay off two (2) out of the four (4) Eurobond issued under the NDC government in 2013 and 2016 respectively. The African Development Bank loan for the terminal 3 project in 2015 had interest rate of 8.5% recorded in the books of GCAA and the NPP renegotiated the interest of that loan to 5% in 2018. The initial loan agreement on the Tema-Akosombo standard gauge railway project signed in November 2016 and financed by the Eximbank of India had 6 Months Libor + 1.75% but the NPP government in May 2017 went to India to renegotiate it down to 6 Months Libor + 1.50%.
48. The Pokuase interchange project financed by the African Development bank also led to renegotiation into a tier 4 under Nana Addo with same financing arrangement just as the tier 3 under the NDC. In 2016, the NDC collateralized the Road fund for GH¢1.2 billion loan at UBA Bank at an interest rate of 31.9% with 2years maturity period. The NPP in 2017 refinanced the loan with another facility from GCB Bank and Fidelity Bank at an interest rate of 22% which came with 3years longer tenure.

Financial Sector Performance

49. The Bank of Ghana’s 2017 and 2024 publication “Summary of Economic and Financial Data” provides very rich information about the performance of the financial sector. The annual growth in Total Assets of the financial sector as at the end of 2024 was 33.8%. This compares to an annual growth of 27.6% as at the end of 2016. The Annual Growth in total deposits as at the end of 2024 was 28.8% as compared to 24.5% in 2016.Similarly, in terms of liquidity, core liquid assets to short-term liabilities grew by 46.3% in 2024.
50. The Capital market shows similar strong performance with the GSE All Share Index Year to Date growing by 56.2% by December 2024. The earnings and profitability ratios also show that Return on Asset before Tax recorded an annual growth of 5.4% in December 2023 and 5% in December 2024; whilst Return on Equity after tax grew at 34.2% in December 2023 and 30.8% in December 2024. It is no secret that the strength of an economy is also determined by the strength of its financial sector.

Yield Curve

51. ‘Mr. Speaker, I am pleased to report that our government’s proactive fiscal management has yielded a significant reduction in treasury bill rates. This achievement is a testament to the positive shift in investor sentiment regarding our country’s economic outlook.’’
52. However, there are interesting things happening on the T bill market.
53. Lower T-bill rates: commendable
54. But why are the rates dropping?
    • Artificially managed by the Minister for Finance?
    • is it sustainable?
    • Is the Finance ministry controlling both price and quantity?

53. I ask these questions because of two reasons. First, the decline is not consistent with the economic fundamentals – inflation at 23.5% and MPR at 27% while 91-day T bill at 19.76%. What it means is that the commercial banks who purchase these bills will be having negative real returns. Do you think any Banks or any good treasurer will be prepared to accept an offering lower than inflation? A good treasure will not do this. And if any good treasurer will not do this, don’t we suspect artificial hands to bring rates down for propaganda purposes. If this is generated by economic fundamentals, then the monetary policy rate is out in line with the market. Is the Central Bank ready to bring the MPR down to where inflation is? If not, then there is something fundamentally wrong with the rates drop. If this is sustained and inflation is continuously above the T bill rate, any rational treasury management will find solace in currency trading other than T bills that give a negative real rate of return. Then the disinflation process will dislodge.
54. Secondly, there appears to be what looks like the BoG subordinating its monetary policy to fiscal policy? We all agree there is excess liquidity in the market. The BoG Act 2002 (Act 612) and the BoG (Amendment) Act 2016 (Act 918) establish the banks objective as maintaining price stability. The bank controls inflation and manage liquidity through open market operations (OMO). OMO both 14 and 56 days are issued at is MPR +/-2. (Liquidity framework). If this is done, treasurers will not go to the T bill at a rate below inflation. Is the BoG doing the OMO? There is excess liquidity in the system so under what justification are they not doing OMO
55. This is only possible as a result of something causing a disfunction on the T- bill market engineered by the Finance Minister to control both price and quantity. Consequently, inflation will go up and there will be pressure on the currency.
56. Clearly, we can see that there is excess liquidity in the system. So, one will be extremely surprised if, indeed, the BoG is staying out of the OMO market. I really hope that is not the case. Because if this is the case, then it is clear the central bank is compromising monetary policy objectives for short-term gain by the MOF. How can the governor agree in a meeting with Banks that he will revise the currency reserve ratio (CRR) in the midst of such excess liquidity.? And at the same time, stay away from OMO? This is setting up a scenario where we will see inflation rising again. Meanwhile, the banks are not lending. That’s why they are bringing to the T bill market. If you continue to artificially force the rates down against the trends in the economic fundamentals, they will begin to buy forex.

EVERY DAY ISSUES

Ladies and gentlemen of the press, ahead of the budget reading, there are a number of issues that many Ghanaian youth and small businesses were expecting will be addressed by the new Government’s economic policy. These included issues of Cost-of-Living challenges, unemployment, investments in infrastructure, investments in education and efforts to improve the business climate.

57. Unfortunately, these issues were not addressed by the economic policy. For those who were looking forward to efforts to halt further increases in electricity bills, they were disappointed to note that electricity prices would rather be adjusted every quarter. This quarterly adjustment, with no policy intervention from the NDC government will mean an increase in electricity tariffs every quarter. Worse is that the government clandestinely removed the subsidies on gas prices thereby increasing the weighted average cost of gas from $7.8 to $8.4 per mmbtu. What this means is that not only will energy prices go up, but they will go up at a higher base rate from now on. No hope when it comes to resetting energy pricing.
58. Fuel price increases which influenced the choices of many drivers in the last election, also did not see a respite in policy direction. Contrary to the NDCs promise that they will use special petroleum levy to intervene in the market and cushion consumers, the government went silent on fuel pricing. Ladies and gentlemen, without any policy intervention announced in the budget, it stands to reason that drivers can expect the rises in fuel prices to continue. No hope when it comes to resetting fuel pricing.
59. Food inflation has been a major challenge to most Ghanaians. In the months recently gone by, you will recall how food prices, the size of a ball of kenkey and others have become topical for Ghanaians. In the policies outlined by the Government, there is no efforts to deal with the issues that affect the key drivers of food inflation. The governments program is only to boost production like the NPP did under the Planting for food and jobs program. The key remaining challenges such as the transportation of food items from farm gates, poor storage of foodstuff, and a liberalised pricing regime means that continuous increases in food prices, have not been addressed. Food price inflation will therefore remain in the medium term. The 2025 economic policy has not addressed it. There is no hope when it comes to resetting the trend of food inflation.
60. Transport fares can be expected to unfortunately continue rising. This is because the government has not introduced any measures to intervene with market forces. The underlying issues of fuel and the increasing cost of imported spare parts have not been addressed by the 2025 economic policy. There is no hope when it comes to resetting increases in transport fares.
    61. On the matter of unemployment, the youth were looking forward to either high growth targets to create jobs or at the least government employment programs in the public service have been sorely disappointed. Unfortunately neither of these were expressed in the budget. Instead in paragraph 478 of the policy document, the Government announces a net freeze on public sector hirings. Growth is also rather constrained to 4.4% YoY as against the NPPs 5.7% growth. If growth was expected to go higher there could have been hope that young people will even find jobs in an expanded economy through private sector. Despite the rhetoric, the facts are that the hope for jobs has been extinguished. There is no resetting here. Actually the situation will be getting worse. Is this the reason why the administration from the onset deliberately dismissed thousands of young people who had been properly recruited by the previous administration so as to create artificial vacancies to be used in recruiting some of the NDC youth?

62. While improving the job creation ecosystem is a problem it is alarming how however the compensation budget of the office of Government machinery has ballooned from GHS 327 million, to GHS 2.7 billion. This is while the government claims to have hired less workers at the Presidency. It is only the NDC that hires less workers but compensation budgets balloon. Yet there is no room for youth jobs in the public services and constrained growth in the economy to absorb other unemployed youth. There hope of a reset on the jobs agenda is fading.
63. Infrastructure investments are known to be a key to opening up the space for growth and jobs in the economy. Unfortunately, however the government has failed in making the necessary budget allocations to give meaning to its planned infrastructure program – the big Push. Out of the expected $2.5billion to kick start the program this year, the government has announced that it can only make available 800m (less than 1 billion). In effect, the Big Push itself needs a push if anything meaningful will happen in infrastructure.
64. Even more worrying is that the Agenda 111 project which many districts are looking forward to, appears to be heading for a halt. Budget allocations for its continuation appear illusive. The dedicated source of funding GIIF Health, which was receiving funds from the Capex allocation of ABFA is now constrained as the government signals it will be cutting funding to GIIF. Furthermore no clear alternative financing has been identified in the budget to fund the project. This is truly worrying. Not only is it contrary to the NDCs promises to health workers that it will continue the projects, abandoning them or giving them out as franchises will jeorpadize the efforts at universal health coverage. The millions of citizens in remote districts who are looking forward to their lives being saved from this healthcare intervention are now at risk. Mr President, in the name of God, please do not abandon them for political reasons.

IMF

65. The expenditure measures of uncapping transfers to some statutory funds to enable them to fund other government programmes is no brainer. Every government has at it’s discretion how to fund its programmes. While we capped the transfers to the statutory funds and used the capped funds to fund Free SHS and other programmes, this NDC government has decided to uncap transfers to the GETFUND so that GETFUND will fund Free SHS. How on earth is this brilliant? Also, by virtue of the debt restructuring, government absorbed the GETFUND debt and so this is not new. So is the allocation of ABFA to their Big Push CAPEX budget. If this is how they want to spend ABFA, they are at liberty to do so once they amend the PRMA or the necessary Acts. The point here is that, these measures are not new and it’s the government’s funding style.
66. Per the earmarked funds capping and realignment Act, it is ok for the Minister to exercise discretion with which SFs it restores capped funds to. We did it for NHIS when they had a huge backlog of claims from before 2016. Also, part of the capped funds to the GETFUND was restored at some point.
67. With the increase in capitation grant and LEAP, especially, the government had no choice under the IMF programme as we had developed a strategy paper on LEAP indexation as part of the IMF programme to protect the poor and vulnerable who were going to be affected by the fiscal consolidation from the programme. In this strategy, we had a phased increase in LEAP transfers to ensure that beneficiaries were not worse off following COVID and the rise in inflation. In fact, all the other social transfers aside LEAP were expected to increase as part of the IMF programme.

Thank you