The Finance Minister, Dr. Cassiel Ato Forson has announced a bold strategy to tackle Ghana’s fiscal challenges, emphasizing spending cuts over tax hikes as a means to reduce the fiscal deficit and public debt.
Presenting the 2025 Budget statement, the finance minister highlighted the country’s economic realities and the need for responsible fiscal management.
“Ghanaians, through the recent National Economic Dialogue, have expressed a clear desire for the fiscal deficit and public debt to be reduced through cuts in government spending rather than through only tax measures. We wholeheartedly agree!” the minister stated.
Ato Forson added that efforts will be made to restore fiscal responsibility through enhanced public financial management. “Going forward, we will tailor our expenditures to align with our fiscal realities. After all, ‘whoever pays off their debt gets rich,’” the minister emphasized.
As part of this approach, the government will prioritize a spending-led fiscal adjustment, which is expected to help lower inflation, stabilize the cedi, and reduce reliance on borrowing.
Ato Forson explained that this strategy would also ease pressure on monetary policy, allowing the Bank of Ghana greater flexibility to lower interest rates, ultimately leading to lower bank lending rates.
The government is also implementing what the minister described as a “shock therapy” approach, which involves significant spending cuts in 2025 to reduce financing pressures and accelerate fiscal stability. “We are implementing a form of ‘shock therapy’ to the economy by making significant spending cuts this year, thereby reducing the government’s financing needs and frontloading fiscal adjustment,” he said.
Source: Ghana/Starrfm.com.gh/103.5FM/Deborah Amuzu
