Financial Institutions' and Private Equity Investors' Desires in Minister of Finance's Mid-Year Budget Overview
The upcoming mid-year budget review by Ghana's Minister of Finance, Dr. Ato Forson, on July 24th, 2025, is set to address three priority areas: macroeconomic stability, regulatory and policy reforms for domestic capital allocation, and industrialization policies.
Macroeconomic Stability
Investors are eager to see evidence of continued fiscal discipline and macroeconomic improvements. The mid-year review is expected to showcase lower inflation, controlled deficits, currency stability, and a positive primary fiscal surplus. Preliminary data indicates that inflation has dropped significantly from 23.8% to 13.7%, the primary surplus has exceeded targets (1.1% vs. 0.4% of GDP), and tax revenue performance has been solid, collectively boosting confidence in economic stability and growth prospects.
Regulatory Reforms
Clear tax policy updates and regulatory enforcement are crucial for improving the business climate and revenue mobilization. The government plans to address this by highlighting VAT reforms, customs reforms to reduce revenue gaps, the withdrawal of tax exemptions on marine gas oil to curb smuggling, and enforcement of prohibitions on foreign currency contract pricing. These reforms aim to enhance transparency, compliance, and fiscal sustainability.
Domestic Capital Investment Opportunities
The budget review will signal the government's commitment to private sector expansion through opportunities in infrastructure, energy sector support, and increased domestic revenue generation. With improved revenue outlooks and prudent spending, investors see potential for stable returns and expanded local market activities.
The National Pensions Regulatory Authority (NPRA) 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. This mandate, which could unlock over GH¢5 billion, is a game-changer, shifting pension funds from primarily passive, short-term government debt instruments to long-term, growth-oriented private sector investments.
Industrialization Policies
The budget review is also expected to signal industrialization policies that will attract foreign investment, drive industrialization, job creation, and expand Ghana's tax base. The focus of these policies is on creating a more conducive environment for domestic capital to attract foreign investment, drive industrialization, job creation, and expand Ghana's tax base.
Businesses incentivized to operate 24/7 or invest in industrialization will generate higher turnovers and profits, leading to increased corporate tax revenue and the formalization of more businesses and the growth of existing ones. The budget review is expected to include specific tax incentives, discounted night-time electricity tariffs, and streamlined regulatory processes for businesses adopting 24/7 operations.
Promoting industrialization and the 24-hour economy creates demand for labor across multiple shifts, generating a significant number of decent jobs in manufacturing, logistics, services, and other key sectors. Directing patient capital to SMEs and high-growth companies enables them to scale, expand production, and invest in human capital, providing a direct boost to job creation, particularly skilled and semi-skilled positions in emerging industries.
The LP Act is crucial for creating legal certainty and a standardized structure that reduces transaction costs and attracts both local and international limited partners (investors) to Ghanaian funds. The LP Act provides a familiar and robust legal framework for private equity and venture capital fund structures, aligning Ghana with international best practices. Having an LP option under the Office of the Registrar of Companies will make Ghana a more competitive jurisdiction for private equity funds.
Overall, investors seek confirmation that Ghana's fiscal management will sustain macroeconomic gains, combined with reforms that lower risks and expand quality investment avenues domestically, supporting long-term portfolio growth. The budget review is also expected to commit to improving critical infrastructure (reliable power, transportation networks, digital connectivity) that directly supports industrial growth and reduces the cost of doing business.
The Ghana Venture Capital and Private Equity Association (GVCA) has stated that private equity capital investors and institutional investor trustees are focusing on specific policy announcements in the upcoming mid-year budget review. The review is expected to facilitate the growth of key sector businesses, increasing their profitability and corporate income tax contributions, thereby diversifying the tax base away from reliance on traditional revenue streams.
- The upcoming budget review is anticipated to show a commitment to personal-finance management, with a primary surplus that surpasses targets and solid tax revenue performance, indicating continued fiscal discipline and improved economic stability for investors.
- To promote technology integration in business and education-and-self-development, the budget is expected to highlight VAT reforms and customs updates to foster a more transparent and compliant business environment, as well as setting aside funds for the development of critical infrastructure like digital connectivity.
- To attract foreign investment and foster industrial growth, the budget may propose specific tax incentives, discounted night-time electricity tariffs, and streamlined regulatory processes, creating opportunities for investments in key sectors that can lead to job creation and the expansion of businesses.
