Ghana 2025 Mid-Year Budget Review: Key Fiscal and Debt Strategy Updates

Recalibration of 2024 Fiscal Framework

The Sovereign has marginally revised its FY2024 total revenue target upwards by 1.3% to GHS 229.9 billion (16.4% of GDP), underpinned by windfall inflows from the Energy Sector Levies (Amendment) Act, 2025 (notably the GHS 1/litre fuel levy). On the expenditure front, total expenditure on a commitment basis have been modestly revised downwards to GHS 269.5 billion, while primary expenditure was adjusted upward to GHS 209.6 billion.

Fiscal Policy Enhancements

The Ghana Revenue Authority, together with the Ministry of Finance, will present a revamped VAT regime by October 2025 as part of the 2026 Budget. Key reforms include the abolishment of the COVID-19 levy, a streamlined VAT structure with a unified rate, removal of cascading levies (GETFund/NHIS), and increased VAT thresholds to ease the compliance burden on small and micro businesses.

Medium-Term Debt Strategy (MTDS)

The updated MTDS continues to prioritize the mitigation of refinancing and interest rate risks, while pursuing cost-efficient debt servicing. The Sovereign has indicated intent to gradually re-access the primary bond market via selective reopening of medium-term instruments introduced under the DDEP framework. External financing will be anchored by IMF-ECF disbursements, World Bank Development Policy Financing tranches, and ongoing project-tied concessional flows.

Sinking Fund Deployment

Starting August 2025, the Sovereign will systematically build buffers within the Cedi and USD Sinking Fund Accounts. These buffers will be dedicated to smoothen redemption pressures from GHS 20 billion (2026), GHS 50.3 billion (2027), and GHS 45.75 billion (2028) in domestic maturities, as well as USD 1.42 billion (2026), USD 1.17 billion (2027), and USD 1.14 billion (2028) in Eurobond repayments.

Liability Management Operations

The Sovereign plans to conduct domestic bond market diagnostics to explore buyback windows while sequencing benchmark issuances with a bias toward long-dated tenors, aimed at curve elongation and market deepening. Treasury bills will strictly serve liquidity management functions, while budget deficit financing will be routed through the domestic bond curve.

Flagship Initiatives

Under the 24-Hour Economy and Accelerated Export Programme, capital outlays will be directed towards the Volta Economic Corridor, including agro-industrial zones, transport links, and tourism infrastructure.

Meanwhile, the Big Push Programme will fund 45 road projects with budgetary allocations tied to petroleum and mineral receipts.

National Investment Bank (NIB) Recapitalization

The Sovereign has injected GHS 450 million in cash, issued GHS 1.5 billion in marketable securities, and transferred GHS 500 million worth of government equity in Nestlé Ghana to bolster NIB’s balance sheet, improving its CAR from -53.13% (Dec 2024) to 23% (May 2025). Plans are underway to list the bank on the GSE.

Primary Dealers & Bookrunner Selection

In Q3 2025, the Sovereign intends to appoint bookrunners with strong distribution capacity and structuring expertise, to support eventual re-entry into the local capital market.

Our Views

We interpret the Sovereign’s signaling, through the proposed reopening of DDEP-aligned medium-term instruments, liability management operations focused on curve consolidation, and the imminent selection of bookrunners, as a calculated prelude to re-entry into the domestic bond market, likely materializing in Q4 2025. This aligns with a broader objective of market normalization and rebuilding investor confidence post-DDEP.

Again, the decision to deploy Treasury bills strictly for cash management purposes reflects a conscious strategy to reduce over-reliance on short-dated instruments and avoid excessive rollover risks. This shift suggests a pivot towards medium- to long-term financing via benchmark bond issuances, thereby improving tenor distribution and enhancing the durability of the yield curve.

In the near term, this evolving issuance strategy is likely to create a supply squeeze at the front end of the curve. Given still-elevated demand for risk-free assets, this imbalance presents strong technical grounds for further compression in short-term yields.

Overall, we view the first-half fiscal execution as broadly credible. Key macro indicators, particularly revenue outturns and expenditure controls point to improved budget discipline. Coupled with structural reforms to the tax regime and renewed focus on debt sustainability, the Sovereign’s fiscal posture suggests a turning point in Ghana’s macro-fiscal trajectory.

Kindly see the report attached.

If you have queries or require additional information, you may contact us via [email protected] or call us on 0302 50 90 45.

InvestCorp Research

#15 Wawa Drive, North Dzorwulu

P. O. Box GP 22493, Accra

Tel: +233 (0) 302 50 90 45 | +233 (0) 303 93 75 84

Email: [email protected] | Website: www.investcorpgh.com