KPMG/UNDP 2025 Budget Highlight

The global economy in 2025 navigates a precarious balance of opportunity and fragility. Growth is projected at 3.3% in 2025, slightly above the projected outturn of 3.2% in 2024.

This  projection aligns with forecast of growth for emerging markets, yet it is tempered by headwinds from escalating tariff wars and the unpredictable economic ripples of the Trump administration’s policies. A potential peace deal between Ukraine and Russia offers tentative relief. Nevertheless, geopolitical tensions and trade uncertainties continue to cast long shadows over the world’s economic prospects and this definitely impacts the Ghanaian economy.

The Ghana Statistical Service has announced a 5.7% real GDP growth for 2024, a significant leap from 3.1% in 2023, driven by the industry, mining, quarrying, and agriculture sectors. Yet, formidable challenges persist. Inflation, at 23.1% in February 2025, remains a stubborn adversary. The cedi’s depreciation, coupled with climate-induced agricultural disruptions and infrastructure deficits—evident in persistent power outages and water shortages—tests the country’s economic endurance. 

In response to these multifaceted pressures, Ghana’s Minister for Finance, Dr. Cassiel Ato Forson, tabled the 2025 Budget Statement and Economic Policy before Parliament on March 11, 2025.

Anchored under the theme “Resetting the Economy for the Ghana We Want,” the budget articulates a vision to confront fiscal imbalances and structural vulnerabilities while fostering sustainable growth. To bolster domestic revenue while alleviating economic strain, the budget introduces measures as follows:​

• Tax rationalization, involving the elimination of taxes such as the E-Levy, betting tax, and emission levy, alongside a comprehensive review of the VAT system to enhance revenue collection without overburdening taxpayers. In addition, the budget abolishes the 1.5% withholding tax on unprocessed gold to curb smuggling and boost state revenue via the Ghana Gold Board initiative.​
• Compliance enhancement through digitized tax systems under the Modified Taxation System, an extended Voluntary Disclosure Programme waiving penalties for undeclared accounts and arrears, and sustained tax education campaigns to lift SME and personal income tax compliance from its current low of below 30%.​
  Revenue diversification, by increasing the Growth & Sustainability Levy on mining from 1% to 3% to capture windfall gains from high gold prices, reintroduce technology-driven road tolls to fund infrastructure, and consolidate energy sector levies under the Energy Sector Levies Act to address shortfalls and debt obligations.​

Expenditure-side reforms underpin the 2025 budget’s fiscal consolidation strategy. These reforms introduce controls such as a comprehensive audit of arrears and commitments as of December 2024, mandatory use of purchase orders aligned with the Medium-Term Expenditure Framework, and amendments to the Public Procurement Act to enforce commencement certificates and establish an Independent Value-for-Money Office.

The integration of GHANEPS with GIFMIS and strict enforcement of Public Financial Management Act sanctions will enhance fiscal discipline. Government is committed to cutting expenditure through removal of programmes such as GhanaCARES, YouStart, and 1D1F while streamlining resource reallocation to support infrastructure and social protection initiatives.

KPMG views the 2025 budget as a critical step toward economic recalibration. The removal of taxes such as the E-Levy is a commendable move, likely to stimulate consumption by increasing disposable income. These steps align with insights from the KPMG/UNDP 2025 Pre-Budget Survey, where 80% of respondents expressed optimism about President Mahama’s policies towards economic recovery, and over 70% endorsed the 24-hour economy vision for jobs and prosperity. However, the fiscal corollary of these cuts demands careful management to avoid revenue shortfalls that could destabilize macroeconomic gains.

The Government's multi-pronged approach by combining expenditure cuts, commitment controls, and redirecting tax refund savings hinges on disciplined execution. As Ghana embarks on this economic reset, the collaborative spirit of the Post-Budget Forum on 13 March 2025, underscores the importance of stakeholder engagement. The budget’s consultative process, incorporating voices from traders, youth, and industry, reflects a commitment to inclusive governance. Therefore, sustained dialogue and adaptive policymaking will be critical to meeting the evolving needs of citizens and businesses.