Ghana’s Finance Minister Advocates Urgent Economic Reforms

Ghana’s Finance Minister, Dr. Cassiel Ato Forson, has urged for urgent economic reforms to enhance fiscal efficiency and sustainable growth. He highlighted the over-reliance on resource extraction and rising debt levels, which restrict investment in essential sectors. The continued dialogue aims to propose strategies for economic transformation and fiscal discipline.

In a recent address, Ghana’s Finance Minister, Dr. Cassiel Ato Forson, underscored the pressing need for economic reforms to enhance fiscal efficiency and sustainable growth. At the National Economic Dialogue held on March 3, 2025, he noted that the economy has averaged a growth rate of 4.4% in recent years, predominantly driven by the oil and mining sectors, which has hindered significant structural transformation.

Dr. Forson pointed out that agriculture constitutes one-third of the nation’s GDP, with manufacturing productivity remaining notably low. He expressed concern that over 85% of exports in 2024 stemmed from primary commodities, indicating a heavy reliance on resource extraction.

Cautioning about escalating debt levels, the minister revealed that Ghana’s debt rose dramatically from 20% of GDP in 2016 to 93% by 2022. He further explained that persistent fiscal deficits above 4% of GDP from 2008 to 2019 placed immense strain on public finances. Non-essential expenditures, such as public wages and interest payments, account for approximately 70% of government spending, limiting investment in critical areas like infrastructure and social programs.

Dr. Forson criticized the inefficiencies in public spending, particularly within the education and health sectors. He highlighted that only a quarter of education funding is allocated to pre-primary and primary levels and that less than 60% of the budget for the National Health Insurance is utilized for claim payments due to mismanagement of resources.

Emphasizing the need for proactive measures, Dr. Forson reiterated the importance of diversifying the economy beyond commodities and enhancing spending efficiency. He stated, “We must reset our economy by addressing these systemic challenges to achieve long-term resilience and inclusive growth.” The dialogue is set to continue, with stakeholders expected to propose actionable solutions for economic transformation and fiscal discipline.

In conclusion, Dr. Cassiel Ato Forson’s address at the National Economic Dialogue highlighted significant structural challenges within Ghana’s economy. His call for urgent reforms emphasizes the need for diversification beyond commodity reliance and improved efficiency in public expenditure. Stakeholders are anticipated to engage in discussions aimed at formulating actionable strategies for sustainable economic growth and fiscal responsibility.

Original Source: www.gbcghanaonline.com