The upcoming budget presentation by Ghana’s NDC government marks a pivotal moment in the nation’s economic journey. Set against a backdrop of severe economic challenges, including crippling inflation, currency depreciation, and the aftermath of the domestic debt exchange programme, this budget will potentially shape Ghana’s economic trajectory for the next decade.
Food inflation remains one of the most pressing concerns for everyday Ghanaians. When basic necessities become unaffordable, the entire economy suffers. The budget must address this through strategic investments in agriculture, potentially reviving policies like the “Operation Feed Yourself” initiative from the Acheampong era, which encouraged Ghanaians to cultivate available land. Additionally, providing interest-free or soft loans to farmers could stimulate food production and ultimately bring down prices, making three square meals a day accessible again for the average family.
The taxation landscape in Ghana requires urgent reconsideration. The E-Levy, COVID-19 Levy, Betting Tax, and Emissions Tax have become significant burdens on businesses and individuals alike.
While these taxes generate revenue, their negative impact on economic activity may outweigh their benefits. The government could compensate for potential revenue loss by addressing public sector corruption, which reportedly costs Ghana approximately 2.5 billion USD annually, and tackling gold smuggling, which drains an estimated 5 billion USD yearly from the economy.
Interest rates in Ghana remain among the highest in the West African sub-region, deterring investment and hampering business growth. The budget needs to outline mechanisms through which the Bank of Ghana can gradually reduce its policy rate from the current 27%.
Lower interest rates would stimulate borrowing, investment, and expansion among businesses, particularly small and medium enterprises that form the backbone of the economy.
Indigenous Ghanaian businesses deserve special attention in this budget. Currently, key sectors of Ghana’s economy are dominated by non-Ghanaian interests – Lebanese, Indian, and Chinese businesses control significant portions of the retail and manufacturing sectors, while European companies dominate mining and oil.
The budget should include provisions for supporting indigenous Ghanaian businesses through preferential loans, tax breaks, and capacity development programmes.
When local businesses thrive, profits remain within the country, stimulating further economic growth and creating employment opportunities.
The extractive sector offers untapped potential for increased government revenue. With gold prices at nearly $3,000 per ounce and Ghana producing approximately 5 million ounces annually, the country’s 2% royalty rate seems grossly inadequate. Similarly, the 10-15% revenue share from oil production falls short of what experts suggest should be at least 25%. The budget presents a golden opportunity for the government to boldly renegotiate these agreements, potentially generating billions of dollars in additional revenue that could fund infrastructure development, healthcare, and education.
As Ghana faces the withdrawal of USAID support following policy changes in the United States, the budget must prioritise investment in education and healthcare.
Ghana has the resources to provide these essential services without donor support, particularly if it secures fair compensation for its natural resources. This budget could mark the beginning of true economic independence – “Ghana Beyond Aid” in practice rather than just rhetoric.
