2025 budget: temporary freeze on public sector employment expected as Mahama instructs expenditure cut

As Ghanaians wait in earnest for the first budget of the Mahama administration, public expectations have been stemmed with plans for a possible huge cut in government spending, especially on the public sector wage bill, in an effort to rebuild the economy.

This means that, there could be no new public sector employment in 2025. This is forthright, as President John Mahama has instructed the Finance Minister to cut expenditure as much as reasonably possible.

Speaking to organized labour in Accra last week, his government approved a 10% salary increase for public sector workers, President Mahama indicated that, the ‘economy was criminally handled by the previous NPP administration’.

“I couldn’t understand how the previous government was so reckless in the handling of the economy”, President Mahama worriedly stated

“One thing that is a cardinal principle for us is to tell the truth at all times. We all knew that the economy was in crisis but some of the things I am discovering myself, have been a criminal handling of our economy, Ghana is a crime scene because how a government can be so reckless I can’t understand it.

“But we are faced with a reality, our options are very few, we can behave like the ostriches and hide our heads in the sand and let the economy crash but then what effect will it have on Ghanaian households and everybody? So I have told the Finance Minister to cut expenditure as much as he likes – even for we ourselves in government machinery – cut as much of our budget as you like because we all must make those sacrifices. A certain distrust for the political class has arisen because it is like when everybody else is tightening their belt, the political class is loosening itself. I want to assure you that we are all going to tighten our belts. and there will be no wasteful expenditure.”

Instructively, Dr. John Kwakye, Director of Research at the Institute of Economic Affairs (IEA), had earlier called on the Mahama administration to close tax loopholes and curb wasteful spending.

Dr. Kwakye said these measures would help the government recover revenue lost from planned tax eliminations.

In a post on X (formerly Twitter) last week, he stated, “Plugging tax loopholes and cutting expenditure waste will be enough to compensate for intended tax eliminations.”

Already, President Mahama has also emphasized the need to strengthen Ghana’s Fiscal Responsibility Act and the Public Financial Management Act, highlighting the importance of reducing waste and tackling corruption.

Speaking at the Africa Business Forum 2025 in Addis Ababa, Ethiopia, President Mahama said, “We must analyze the factors that brought Ghana to this point and implement steps to ensure we do not end up in this situation again. That will entail strengthening the Fiscal Responsibility Act and the Public Financial Management Act.

“We need to cut out waste and reduce corruption. These are some of the critical issues that must be addressed.”

Source: newsguideafrica.com