The Finance Minister, Cassiel Ato Forson, presented the first annual national budget and economic policy statement of the John Dramani Mahama administration to Parliament.

Given the recent political transition, the budget has generated significant debate, particularly in light of the administration’s commitments to addressing long-standing structural challenges in Ghana’s economy, which remains heavily reliant on commodity exports and consumer goods imports. Additionally, the budget responds to specific economic challenges inherited from the previous administration.

As obviously expected, criticism immediately followed the budget presentation. The former Finance Minister, Mohammed Amin Adam, questioned the feasibility of the new administration’s economic targets, highlighting that the projected Gross Domestic Product (GDP) growth rate of 4.0% for 2025 is lower than the 5.7% recorded in 2024. He also raised concerns about the projected decline in gross international reserves, which are expected to cover three months of imports in 2025, compared to 3.7 months at the end of 2024.

While some analysts have dismissed these criticisms as attempts to defend the previous administration’s economic performance, other observers have identified several areas of concern in the 2025 budget that have received limited public scrutiny but may have significant implications for Ghana’s economic trajectory.

A key concern regarding the 2025 budget is its primary emphasis on fiscal consolidation in response to the country’s challenging financial circumstances. While fiscal consolidation is essential for improving government finances, the budget provides limited attention to economic expansion as a strategy for job creation and wealth generation. This raises questions about how the administration intends to address the broader economic challenges facing households, particularly in light of its commitment to improving living standards.

Although stabilising public finances is a critical objective, it may not directly translate into improved economic conditions for households, many of whom supported the current administration with expectations of economic recovery following the downturn that began in 2022. The budget offers minimal focus on broad-based economic diversification and expansion. The primary sector receiving attention is agriculture, yet the agro-processing industry—which the administration had previously highlighted as a key link between agriculture and manufacturing—receives little emphasis.

Furthermore, while the budget outlines technical support for agriculture and cost reductions for equipment, it does not provide clear strategies for financial assistance to support agricultural production. The Agriculture for Economic Transformation Agenda has been allocated GH¢1.5 billion, representing the primary sectoral allocation for productive economic activities.

A significant concern regarding the 2025 budget is its limited focus on manufacturing and trade. Notably, the One District One Factory (1D1F) initiative introduced by the previous administration has been formally discontinued. While policy continuity has historically been a challenge in Ghana’s governance, and the 1D1F program faced implementation challenges under the Akufo-Addo administration, its cancellation removes a policy aimed at decentralizing industrialization, fostering job creation in rural areas, and aligning factory locations with natural resource distribution. Many industrial sector analysts had anticipated that the current administration would refine and improve the initiative rather than discontinue it without introducing a clear alternative industrialization framework.

Similarly, gaps exist in international trade policy. The Mahama administration has emphasized import substitution as a strategy to reduce reliance on foreign exchange, which line up with its broader economic objectives. However, Ghana’s largest import category consists of refined petroleum products, which are not currently produced domestically. The primary policy response in this area, as outlined in the 2025 budget, is the discontinuation of the Gold-for-Oil program, which, while not significantly reducing fuel prices as initially expected, provided some relief on foreign exchange reserves.

Beyond petroleum imports, intermediate production inputs for domestic manufacturing constitute approximately two-thirds of Ghana’s non-oil import bill, contradicting the assumption that most imports are finished consumer goods. Despite this, the budget does not outline any measures to safeguard access to essential industrial inputs, particularly in the context of rising global trade protectionism. Given the increasing use of tariffs and trade restrictions in global markets, including ongoing tensions between the United States and other economies, Ghana may face challenges in securing necessary imports under evolving trade conditions.

One potential avenue for addressing these trade concerns is deeper integration into the African Continental Free Trade Agreement (AfCFTA). Despite the AfCFTA secretariat being headquartered in Accra, the 2025 budget provides minimal attention to leveraging Africa’s growing single market. Greater engagement with AfCFTA could help mitigate Ghana’s import dependency by facilitating intra-African trade through the Pan-African Payments and Settlements System (PAPSS), which enables transactions in local currencies instead of foreign exchange.

Without a strong emphasis on expanding trade and industry beyond the proposed 24-hour economy—an initiative that remains pending—the effectiveness of the Mahama administration’s job creation strategy remains uncertain. Addressing youth unemployment, currently estimated at 30%, was a key component of the administration’s electoral platform.

However, the 2025 budget prioritises fiscal consolidation, reducing Total Expenditures (on a commitment basis) to GH¢269.1 billion (20.7% of GDP) from GH¢279.2 billion (26.0% of GDP) in 2024. This shift suggests that while employment-focused initiatives remain in place, their budgetary allocations may be more symbolic than transformative in addressing labor market challenges.

For instance, the Women’s Development Bank has been allocated GH¢51.5 million in seed capital, the National Apprenticeship Programme GH¢300 million, and the National Coders Programme GH¢100 million. Collectively, these three initiatives, which are positioned as key job creation mechanisms, will receive less than half a billion cedis in total. Given the scale of Ghana’s unemployment challenge, this level of funding may limit the overall impact of these programs.

A key omission in the budget is a direct allocation for the 24-hour economy, the administration’s flagship economic initiative. Instead, the Finance Minister has outlined five key legislative reforms that must be enacted before implementation can begin. As the legislative process is expected to take considerable time, the government has not provided a definitive timeline for the initiative’s rollout.

Overall, the 2025 budget parallels with the administration’s electoral commitments in principle but does not yet provide concrete measures to fulfil them. While the emphasis on fiscal consolidation may suit the International Monetary Fund (IMF) recommendations, the practical impact on job creation and economic relief for the electorate remains uncertain, with key policies still in their introductory stages.