Malik Basintale, CEO of Ghana’s Youth Employment Agency, has praised the 2025 budget statement presented by Finance Minister Dr. Cassiel Ato Forson, asserting its positive impact on the national economy and its potential to reshape the political landscape. Basintale, also a Deputy National Communications Officer for the National Democratic Congress (NDC), observed a noticeable shift in the demeanor of opposition Members of Parliament (MPs) following the budget announcement, suggesting that the proposals resonated deeply with the public and potentially weakened the opposition’s standing. He contended that the budget’s measures created a sense within the opposition that their party was losing its appeal to the Ghanaian electorate. This perceived shift highlights the potential political ramifications of the budget, extending beyond its immediate economic implications.
The 2025 budget prioritizes alleviating the financial strain on citizens by targeting what it terms “nuisance taxes.” These include the controversial Electronic Transfer Levy (E-Levy), a tax on electronic transactions that had faced significant public resistance. The removal of this levy, along with taxes on betting, motor vehicle insurance (VAT), and industrial and vehicular emissions, signals the government’s commitment to reducing the tax burden and stimulating economic activity. These targeted tax cuts are intended to provide immediate financial relief to individuals and businesses, fostering a more conducive environment for economic growth and investment. By eliminating these taxes, the government aims to inject more disposable income into the economy, potentially boosting consumer spending and business investment.
Beyond tax cuts, the budget outlines strategies to stabilize the Ghanaian cedi, a key concern for economic stability. The establishment of the Ghana Gold Board (GOLDBOD) is a central component of this strategy. GOLDBOX aims to bolster the nation’s foreign exchange reserves by leveraging the country’s gold resources. This initiative seeks to strengthen the cedi’s value by increasing the nation’s holdings of foreign currency, thereby providing greater stability against external economic shocks. By linking the cedi’s value to gold reserves, the government aims to create a more resilient currency less susceptible to fluctuations in the global market.
The energy sector also features prominently in the budget, with a focus on renegotiating agreements with Independent Power Producers (IPPs). The primary objective of these renegotiations is to reduce fixed capacity charges, a significant cost component in the energy sector. Lowering these charges is expected to reduce the overall cost of electricity, benefiting both consumers and businesses. This cost reduction could stimulate economic activity by lowering operational expenses for businesses and increasing disposable income for households. Furthermore, the budget emphasizes improving metering systems at the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo). These improvements aim to enhance revenue collection by reducing losses due to inaccurate metering and theft, thereby strengthening the financial viability of these critical utilities.
The combination of tax cuts, currency stabilization measures, and energy sector reforms represents a comprehensive approach to addressing key economic challenges facing Ghana. By targeting both immediate relief for citizens and long-term structural improvements, the budget aims to create a more stable and prosperous economic environment. The government’s focus on alleviating financial burdens, strengthening the national currency, and enhancing the efficiency of the energy sector signifies a commitment to addressing fundamental economic concerns and promoting sustainable growth.
The reactions to the budget, particularly within the political sphere, underscore its potential to reshape the economic and political landscape. The perceived impact on the opposition’s morale, as observed by Basintale, suggests that the budget’s proposals resonate with the public and may shift political allegiances. The focus on addressing economic hardships faced by ordinary Ghanaians, coupled with the emphasis on long-term structural improvements, positions the budget as a potentially transformative document, capable of influencing both the economic trajectory and the political dynamics of Ghana. The long-term success of these measures, however, will depend on effective implementation and continued engagement with stakeholders across the economy.
