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Before Finance Minister Dr Mohammed Amin Adams presented the 2024 Mid-Year Budget Review on Tuesday, July 23, 2024, Ghanaians and key stakeholders had high expectations. Key among these were calls for removing certain taxes, including the COVID-19 levy. Additionally, customers of the defunct Gold Coast and pensioner bondholders hoped for government announcements regarding repayment procedures. Despite these expectations, they were not addressed. Nonetheless, the Finance Minister made several significant announcements during the mid-year budget presentation. DUBAWA highlights some key points from the 2024 mid-year budget review.
Reintroduction of road tolls
In 2022, during the budget statement and economic policy presentation, the government abolished all tolls on public roads and bridges, citing aims to enhance productivity and reduce environmental pollution. In place of the road toll, the e-levy imposed on mobile and electronic transactions was introduced.
In 2024, Finance Minister Dr Amin Adams, in his mid-year budget presentation, revealed that the government will reintroduce road tolls, with the implementation set to begin in 2025.
Ghana’s public debt hits GH¢742bn
Public debt has increased annually, drawing widespread criticism from various stakeholders, including the public, the parliamentary minority, numerous civil society organisations, and the opposition National Democratic Congress (NDC). In his presentation, the Finance Minister reported that the government’s provisional total debt reached GH¢742 billion (US$50.9 billion) as of June this year, representing 70.6 per cent of the Gross Domestic Product (GDP).
Revision of macroeconomic targets
The government has announced revisions to Ghana’s macro-fiscal targets for 2024. The GDP growth rate has been revised upward from the initial 2.8% to 3.1%, while the Non-Oil Real GDP growth rate has been adjusted from 2.1% to 2.8%. The government states that these revisions reflect both domestic and global economic developments. However, the end-year inflation target remains unchanged at 15%. Total revenue and grants have been revised to ¢177,220 billion (17.4% of GDP) for 2024, up from the previous target of ¢176,414 billion (16.8% of GDP) set in the 2024 budget.
Labour law to be passed before 2024
President Nana Akufo-Addo announced on Wednesday, May 1, 2024, that the government aims to enact the new labour bill by year-end. However, Austin Gamey, a labour analyst, criticised the bill, accusing the government of plans to restructure the National Labour Commission. However, during the mid-year budget review presentation, the finance minister mentioned that the Labour Bill of 2024, which aims to enhance labour administration and regulation in workplaces, is set to be enacted by the end of 2024. Once passed into law, this bill will introduce significant reforms in the labour sector, including extended maternity leave and the introduction of paternity leave.
Completion of the Domestic Debt Exchange Programme (DDEP)
Significant progress has been achieved following the completion of the Domestic Debt Exchange Program (DDEP) in September 2023. According to the government, two coupon payments have been honoured: the first payment of approximately GH¢5.9 billion in February 2024 and a third payment of GH¢6.1 billion scheduled for August 2024. These timely payments are anticipated to enhance investor confidence in the domestic market and strengthen the overall economy.
Conclusion
The 2024 mid-year budget review highlights several key developments. The government plans to reintroduce road tolls in 2025, reversing its 2022 policy to enhance productivity and reduce pollution. Ghana’s public debt has reached GH¢742 billion (US$50.9 billion), which equates to 70.6% of GDP, drawing criticism from various stakeholders.
Revised macroeconomic targets for 2024 include an increased GDP growth rate of 3.1% and a Non-Oil Real GDP growth rate of 2.8%, though the inflation target remains at 15%. A new labour bill, expected to pass by the end of the year, aims to improve labour administration and introduce reforms like extended maternity and paternity leave.
Additionally, the successful completion of the Domestic Debt Exchange Program (DDEP) in September 2023 has led to timely coupon payments, boosting investor confidence and the economy.
