2025 budget: IEA flags ‘misplaced priorities’ in resource allocation to MDAs

The 2025 budget's allocation of funds to Ministries, Departments, and Agencies (MDAs) has drawn criticism from the Institute of Economic Affairs (IEA), which notes that several vital sectors seem to have been neglected.

The government's decision to uncap several statutory funds, such as the GETFund, Roads Fund, and National Health Insurance Fund, was accepted by the think tank in its budget analysis.

It did, however, voice skepticism that the additional funds would be used to development initiatives as opposed to recurring expenditures.

“A critical look at the allocation of resources to MDAs seems to suggest misplaced priorities in some cases,” the IEA stated in its press release on March 18.

It noted budget irregularities, noting that GHS3.8 billion was allotted to the Office of Government Machinery, while GHS2.7 billion was set aside for staff remuneration.

In contrast, critical sectors including as agriculture and roads received relatively modest allocations of GHS1.6 billion and GHS2.4 billion, respectively.

Similarly, while Education and Health received the highest proportion of GHS28.4 billion and GHS12.7 billion, a sizable portion—GHS27.1 billion and GHS12.2 billion—was given to salaries, leaving only GHS120 million and GHS310 million for capital expenditure

“The allocation of resources to MDAs shows misallocations in relation to the MDAs and in relation to compensation of employees and CAPEX. A rebalancing of spending is required to ensure efficiency and optimal outcomes,” the IEA stressed.

The institute advocates for a more strategic allocation of resources to ensure that vital sectors receive appropriate support for investment and growth rather than being saddled with high recurring debts.