Financial Institutions and Private Equity Investors looking for key insights from the Mid-Year Budget Review by the Minister of Finance
In a pivotal moment for Ghana's economic development, Finance Minister Dr. Ato Forson is set to present the mid-year budget review on July 24, 2025. This review, aimed at maintaining macroeconomic stability and fostering a conducive environment for investment, is expected to transform the expectations of Ghana's investment community into tangible commitments.
The budget focuses on several key areas. Firstly, it emphasises debt reduction, with a decrease in public debt by GH¢113.7 billion. This move, coupled with improved revenue collection and fiscal discipline, creates a more secure environment for private and institutional investors. While no specific new incentives for private equity were detailed, the overall improved economic outlook and credit rating upgrade to B- can encourage institutional investment confidence.
The government's commitment to completing critical infrastructure projects, such as key road projects, is another significant aspect of the budget. These investments aim to reduce logistical costs and improve supply chains, essential for industrial development.
Job creation is also a priority, with the budget targeting GDP growth of 4% and non-oil growth of 4.8%. Maintaining fiscal discipline while protecting vulnerable populations implies support for social stability, which is vital for sustainable job growth.
The budget also places a strong emphasis on expanding Ghana’s tax base through enhanced compliance rather than new taxes. Domestic tax revenue grew by 33.1% year-on-year in the first half of 2025, largely through direct taxes, VAT, and the Excise and Special Levies Act (ESLA).
The LP Act, crucial for creating legal certainty and a standardized structure that reduces transaction costs, is another key factor in attracting both local and international investors. The National Pensions Regulatory Authority has reaffirmed guidelines and reporting requirements for pension funds to allocate at least 5% of their assets to alternative investments like private equity and venture capital by 2026.
Specific tax incentives, discounted night-time electricity tariffs, and streamlined regulatory processes are being proposed for businesses adopting 24/7 operations, aligning with the government's 24-hour Economy policy. This policy links incentives to the 24-hour Economy policy, making it easier for investors to identify viable opportunities that align with national priorities as well as their own risk appetite.
By directing patient capital to Small and Medium Enterprises (SMEs) and high-growth companies, job creation will be boosted, particularly in emerging industries, contributing to higher employment rates and improved living standards. A stable economy leads to predictable business environments, encouraging existing businesses to grow and new ones to emerge, expanding the corporate income tax and VAT base, and reducing currency depreciation.
Having an LP option under the Office of the Registrar of Companies will make Ghana a more competitive jurisdiction for private equity funds. The government is also discussing policies that actively promote and de-risk specific domestic investment opportunities, particularly those aligned with the 24-hour Economy policy and broader industrialization agenda.
The Ghana Venture Capital and Private Equity Association (GVCA) is discussing expectations for the mid-year budget review. For macroeconomic stability, investors want to see a commitment to fiscal discipline, prudent monetary policy, control of inflation, stabilization of the cedi long-term, and reduction of government borrowing from domestic markets. For regulatory and policy reforms, investors want to see accelerated implementation and robust enforcement of reforms designed to channel domestic capital into productive private sector investments, with a focus on the Limited Partnerships (LP) Act.
In conclusion, the mid-year budget review presents a significant opportunity for Ghana to attract private investment, boost job creation, and drive industrial growth. By focusing on macroeconomic stability, regulatory and policy reforms, and industrialization, the budget aims to create a more conducive investment climate, transforming Ghana into a competitive jurisdiction for private equity funds.
- The Finance Minister's mid-year budget review, scheduled on July 24, 2025, intends to attract private equity funds by creating a secure environment for investment through debt reduction, improved revenue collection, fiscal discipline, and a credit rating upgrade to B-.
- The government's focus on expanding Ghana’s tax base through enhanced compliance, coupled with the National Pensions Regulatory Authority's guidelines for pension funds to allocate 5% of their assets to alternative investments like private equity and venture capital by 2026, aims to redirect domestic capital into the private sector, fostering a conducive environment for investment.
- The proposed specific tax incentives, discounted night-time electricity tariffs, and streamlined regulatory processes for businesses adopting 24/7 operations are strategic moves to promote the government's 24-hour Economy policy, making it easier for investors to identify viable opportunities that align with national priorities and their own risk appetite, thereby encouraging both domestic and foreign investments.
