As the nation awaits the presentation of the 2025 Mid-Year Budget Review, a respected academic voice has called on the government to prioritize fiscal consolidation, strengthen revenue performance, and enhance transparency around borrowing strategies.
Dr. Elikplimi Komla Agbloyor, an Associate Professor of Finance at the University of Ghana Business School, shared these views during an interview on the Citi Breakfast Show on Thursday, July 24, 2025, the same day Finance Minister Dr. Cassiel Ato Forson is expected to deliver the Mid-Year Budget Review to Parliament.
According to Dr. Agbloyor, while expectations surrounding this year’s review remain relatively measured, the presentation represents a critical opportunity for the government to solidify recent economic progress and guard against a return to fiscally irresponsible practices.
“We do not expect major surprises in this budget, but what is absolutely essential is that we consolidate the gains achieved over the past months. Fiscal consolidation—particularly in the form of effective expenditure control—should remain a central pillar of the government’s strategy,” he emphasized.
While acknowledging public calls for increased government spending, Dr. Agbloyor cautioned that such measures, if not supported by robust revenue, could widen the fiscal deficit and threaten macroeconomic stability.
“Yes, some stakeholders are pushing for more government expenditure, especially in light of social demands. However, expanding spending without matching it with increased revenue will only deepen the deficit, reignite inflationary pressures, and undermine investor confidence,” he warned.
Revenue Performance and Credibility
Dr. Agbloyor pointed to revenue generation as a key area requiring urgent and sustained improvement. He stressed that credible revenue performance would not only support fiscal stability but also help rebuild trust with investors, development partners, and the broader Ghanaian public.
“Enhanced revenue mobilisation will demonstrate that the government is serious about managing the economy responsibly. It also boosts market confidence and helps attract more stable financing,” he noted.
Focus on Borrowing Transparency Amid Market Changes
Another key area of concern, according to Dr. Agbloyor, is the need for clear communication on the government’s borrowing plans—particularly as economic conditions evolve. With inflation on a downward trend and the Bank of Ghana easing the monetary policy rate, investor behavior is expected to shift away from short-term Treasury bills toward longer-dated instruments.
“The Finance Minister has already indicated that the government may return to the domestic bond market later this year. If that is the case, we would like to see more specific details—timing, volumes, and intended use of proceeds. Transparency in this regard is essential to avoid market surprises and volatility,” Dr. Agbloyor said.
External Financing: IMF and Eurobond Developments
Turning to external sources of finance, Dr. Agbloyor urged the government to provide comprehensive updates on two critical fronts: the restructuring of Eurobond debt and the status of disbursements under Ghana’s IMF-supported program.
“We need clarity on where things stand with the Eurobond restructuring—how far negotiations have gone, and what terms are being considered. Likewise, updates on the next IMF tranche and how those funds will be utilized to support macroeconomic stability are crucial,” he stated.
These updates, he explained, will be vital not only for domestic audiences but also for international observers tracking Ghana’s economic recovery and debt sustainability progress.
Conclusion
Dr. Agbloyor’s remarks reflect a broader call among economists and financial analysts for the 2025 Mid-Year Budget Review to serve as a signal of continued fiscal responsibility. As Ghana navigates a challenging but improving economic landscape, the government’s ability to control spending, raise sustainable revenues, and manage debt transparently will be key to maintaining investor confidence and achieving long-term stability.
With Parliament set to receive the Finance Minister’s review later today, all eyes are on the policy choices and adjustments that will shape Ghana’s fiscal direction for the remainder of the year.
Edited by: KENNEDY AMPONSAH NTI
EASTERN FM 105.1 MHZ
