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(Ecofin Agency) – Ghana’s Finance Minister, Cassiel Ato Baah Forson (pictured), has declared ‘a war” against wasteful government spending. Speaking recently to his staff members during his inaugural address, he stressed the importance of bold economic reforms and disciplined financial management to reposition the Ghanaian economy and ensure inclusive growth.
In a statement released on January 26, the minister said this fight against waste should have started long ago and reaffirmed his commitment to aligning his actions with the presidential vision of making Ghana a more prosperous nation. He called on his team to work together to turn this ambition into reality.
While Forson did not specify which sectors would face spending cuts. However, austerity measures were already implemented under the previous administration of Nana Akufo-Addo to ease budgetary pressures. In 2023, the former president announced a 30% reduction in discretionary budget spending and salary cuts for top government officials, including the president, vice president, ministers, and political appointees.
John Dramani Mahama, the current president, inherited an economy grappling with significant challenges, including persistent inflation, an unemployment rate of 3.1% in 2023 (according to the World Bank), and public debt undergoing restructuring to relieve financial strain.
To address these issues, Ghana has embarked on major macroeconomic adjustments. These include debt restructuring and strict fiscal consolidation supported by a $3 billion economic program financed by the International Monetary Fund (IMF). The IMF expects Ghana’s primary budget balance to reach 1.5% of GDP by 2025, driven by increased domestic revenue collection and a reduction in non-essential spending.
In addition to fiscal measures, President Mahama has introduced structural reforms aimed at reviving the economy and addressing public concerns. These initiatives include cracking down on illegal mining, expanding access to education by waiving tuition fees for first-year students in public institutions, and tackling high prices and unemployment by removing what he called burdensome taxes.
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