The Finance Minister, Dr. Cassiel Ato Forson, has revealed that GH¢28.3 billion out of GH¢68.7 billion in arrears inherited from the previous administration has been validated for payment. Presenting the 2025 mid-year budget review, the minister explained that the forensic audit he commissioned on the arrears is 87% complete and full details will be made available by the end of August 2025.

The audit is being carried out by Ghana Audit Service in partnership with EY and PWC and has so far rejected GH¢3.6 billion in arrears due to errors, duplications, or non-compliance with Public Financial Management and Procurement laws. GH¢27.3 billion is pending validation.

Earlier this month, President Mahama promised to start paying contractors so that they could resume work. With approximately 41% of the arrears validated, there are hopes that significant payments can begin. About GH¢13.6 billion has been allocated in the budget for arrears clearance.

The budget also showed strong fiscal consolidation with the government spending GH¢121.4 billion in the first half of the year against a budgeted expenditure level of GH¢140 billion. Capital expenditure saw GH¢7.1 billion against a projected GH¢18 billion, and interest payments were GH¢25.4 billion against GH¢30.5 billion projected due to the falling interest rates on the domestic market. Energy sector shortfalls, however, were GH¢9.1 billion against a projection of GH¢6.4 billion, likely due to expensive fuel procured for thermal plants in the absence of gas. Revenue performance was largely on target with domestic revenue for the first half of the year reaching GH¢98.6 billion against a target of GH¢101.5 billion.

The fiscal deficit on commitment basis came in at 0.7%, much better than the target of 1.8%. The primary balance on commitment basis also came in at a surplus of 1.1%, far exceeding the target of 0.4% for the first half of the year. This control on spending is expected to keep a downward pressure on domestic interest rates before payments of domestic bond maturities begin in earnest.

Overall, the budget reassures investors about the government’s commitment to fiscal discipline, and it opens the window for a return to the domestic bond market. The minister as hinted with new bond issuances, and the market looks set to grab whatever medium-term bonds will be issued.