Bright Simons Critiques 2025 Budget, Cautions on Low Budget Execution and SOE Bailouts
Honourary Vice President of IMANI Ghana, Bright Simons, has raised concerns over Ghana’s 2025 budget statement, questioning the feasibility of an expansionary fiscal plan within the framework of an International Monetary Fund (IMF)-backed fiscal consolidation effort.
Speaking in an interview with CNBC, Mr. Simons remarked that the likelihood of low-budget execution remains high, undermining the budget’s effectiveness. He pointed to historical trends, citing that between 2016 and 2020, Ghana’s agricultural sector saw only 41% budget execution, as reported by the Food and Agriculture Organization (FAO).
In contrast, peer economies such as Ivory Coast have made strides in fiscal management, achieving an aggregate budget execution rate of nearly 94% in 2023.
Low budget execution, Mr. Simons noted, disproportionately affects capital expenditure, worsening Ghana’s infrastructure investment outlook. He highlighted that gross fixed capital formation as a percentage of GDP has halved since 2010, reflecting declining investment in public assets.
To mitigate this challenge, the new government has pledged to enforce stricter financial controls, requiring government agencies to secure commencement certificates before operationalizing new contracts.
However, Mr Simons cautioned that the lack of detail in Ghana’s medium-term expenditure frameworks (MTEFs) could further complicate budget alignment.
The issue of unplanned financial obligations was also highlighted, with Mr. Simons revealing that Ghana faces over $13 billion in contingent liabilities, with nearly $7 billion linked to the road sector alone. These obligations stem from weak budget discipline and poor contract-to-budget linkage.
Turning to state-owned enterprises (SOEs), Mr. Simons was critical of the prevailing governance structure, which he argued incentivizes poor performance.
“No SOE board has ever been fired for non-performance in Ghana since 1990,” he stated, warning that continuous bailouts, recapitalizations, and equity injections without strict performance oversight amount to wasteful expenditure.
To address this issue, he recommended suspending board perks and remuneration for underperforming SOEs, appointing turnaround specialists, and implementing aggressive management restructuring. However, he noted that where appointments are politically motivated, enforcing financial discipline remains a challenge.
The concerns raised by Mr. Simons add to ongoing discussions about Ghana’s fiscal sustainability as the country seeks to balance economic growth with debt reduction and improved public sector efficiency.
