CSO Budget Forum Calls on Government to Reinforce Fiscal Discipline Ahead of 2025 Budget Announcement

The Civil Society Organisation (CSO) Budget Forum has called on the Ghanaian government to adopt more transparent and structured fiscal management practices as it prepares for the 2025 Budget presentation on March 11. The forum has proposed specific measures to address expected shortfalls in revenue due to the proposed abolition of the E-Levy, COVID-19 levy, and betting tax.

During an event held in Accra last Friday, Abdul Karim Mohammed, the Coordinator of the Economic Governance Platform and a key member of the CSO Budget Forum, highlighted that poor debt management practices have been a central factor contributing to Ghana’s ongoing economic struggles. He noted that the mismanagement of debt has often triggered financial crises, leading to repeated bailouts from the International Monetary Fund (IMF).

Mohammed explained that the core issue lies in debt misreporting and unsustainable borrowing, which has caused significant instability in the economy. He stressed the need for Ghana to adopt internationally recognized accounting standards, specifically the International Public Sector Accounting Standards (IPSAS), to ensure better transparency in national debt reporting. Mohammed criticized past governments for manipulating debt classification, which he believes created a misleading sense of fiscal space and encouraged borrowing beyond the country’s means.

He pointed to several major liabilities, including the Sinohydro deal, the financial sector clean-up costs, and energy sector debt, which were excluded from Ghana’s official national debt stock. According to him, this practice has distorted the true extent of the debt burden and led to excessive borrowing under the false belief that there was available fiscal space. Mohammed argued that such practices should be avoided in the future and that the government must be clear and accurate about the country’s debt levels to prevent more financial crises.

The CSO Budget Forum estimates that the repeal of certain levies, including the E-Levy and COVID-19 levy, will result in a shortfall of around GHS 7.7 billion in revenue. To address this gap, the forum has proposed a series of alternative revenue measures. These include taxing high-net-worth individuals and professional organizations, expanding property taxation, and increasing Ghana’s equity stake in natural resources through the Mineral Income Investment Fund. The forum also suggested raising the personal income tax allowance from GHS 402 to GHS 900 and ensuring that capital gains tax is paid at the point of asset realization to prevent revenue leakage.

In addition to generating alternative revenue, the forum has called for fiscal consolidation, urging the government to focus on reducing unnecessary public spending. Mohammed commended the government’s recent decision to scale down the Independence Day celebrations but stressed that further steps are needed to curb wasteful expenditure. He also expressed concern over the high public sector wage bill, especially regarding overstaffed state-owned enterprises that are consuming substantial government funds without yielding significant returns.

The forum’s recommendations also emphasize the need for stronger economic governance frameworks. The CSO Budget Forum has proposed the establishment of an Independent Fiscal Council to oversee government economic policies and ensure prudent fiscal management. Other suggestions include the adoption of a National Debt Accounting Standardisation framework, the rationalization of flagship government programs to ensure efficiency, strengthening corporate governance within state-owned enterprises, and implementing import substitution policies to reduce the rising cost of living and boost local production.

In response to these suggestions, Finance Minister Dr. Cassiel Ato Forson has acknowledged that the recommendations from the 2025 Economic Dialogue, which involved consultations with various stakeholders such as the private sector, academia, and civil society, will be taken into account for the 2025 Budget. However, he noted that some of the proposals will be phased into Ghana’s medium- and long-term economic frameworks, as they require more time and planning for successful implementation.

Overall, the CSO Budget Forum’s call for more transparent fiscal management, alternative revenue generation strategies, and reduced government expenditure is a timely reminder of the pressing need for Ghana to focus on sustainable financial practices. By addressing these concerns, the forum hopes to support the government in creating a more stable and resilient economy moving forward.