Mid-Year Budget: Avoid unsustainable spending – Economist tells gov’t

Associate Professor of Finance at the University of Ghana Business School, Dr. Elikplimi Komla Agbloyor, has urged the government to focus on fiscal consolidation, revenue performance, and borrowing transparency as it prepares to present the mid-year budget review.

His comments come as Finance Minister Dr Cassiel Ato Forson prepares to deliver the 2025 Mid-Year Budget to Parliament today, Thursday, July 24, 2025.

Speaking on the Citi Breakfast Show on Thursday, July 24, 2025, Dr. Agbloyor said expectations for the budget are modest, but it is crucial for the government to build on recent gains and avoid slipping back into unsustainable spending patterns.

“We do not expect much, but it is important that we consolidate the gains that we are seeing. We want to see a sign of continued fiscal consolidation—i.e., expenditure control,” he said.

“Although some want the government to spend more, that will increase the deficit, which is going to cause problems for us.”

He emphasised the need for improved revenue performance, which, he noted, would boost credibility and help foster market confidence.

Dr. Agbloyor also highlighted the importance of clarity around government borrowing plans, especially as inflation continues to decline and the monetary policy rate eases.

This, he said, is expected to shift investor interest from short-term instruments like Treasury bills to longer-term bonds.

“The finance minister did mention that they are likely to come back to the domestic bond market later in the year. We want to see more details on that,” he noted.

On the external front, Dr. Agbloyor called for updates on key financing developments, including the Eurobond restructuring and IMF disbursements, and how these will be used to consolidate macroeconomic stability.