Inflation, Agriculture, and Industrial Growth prospects take centre stage in Budget Review at ISSER

The University of Ghana’s Institute of Statistical, Social and Economic Research (ISSER) has described the government’s 2025 inflation target of 11.7% as “ambitious,” warning that significant policy discipline is required to achieve it.

Speaking during the ISSER review of the 2025 Budget, Director Prof. Peter Quartey noted that while inflation had improved from a peak of 55% in 2022 to around 23%, the target remains a tough challenge.

“Inflation is still very high and continues to raise eyebrows in international circles,” he said, attributing Ghana’s economic woes not just to global shocks like COVID-19 and the Russia-Ukraine war but also to domestic fiscal indiscipline.

He stressed the need for tighter coordination between fiscal and monetary policies to restore confidence and credibility in the economy. He pointed out that agriculture—particularly food items with significant weight in the Consumer Price Index—must be prioritised if inflation is to be brought down.

In the industrial sector, he welcomed tax reforms such as the removal of the E-Levy and reliefs for pharmaceutical imports but cautioned that declining capital investments and abandoned projects could hamper growth. Industrial output is projected to grow by just 3.8% in 2025, down from 7.1% previously.

On the external front, while Ghana’s current account surplus has improved, largely driven by gold and crude oil exports, Prof. Quartey questioned the sustainability of this growth given that as much as up to 80% of export proceeds are retained offshore.

He also lamented the country’s inability to benefit fully from surging global cocoa prices due to declining production and rigid pre-financing arrangements. “Illegal mining, climate change, and smuggling remain major threats to our cocoa sector,” he added.

Touching on the services sector, he described planned investments like free tertiary education for persons with disabilities as laudable.

“The budget contains positive initiatives, but the key challenge remains – implementation, monitoring, and sustaining fiscal discipline,” he concluded.