The Chief Executive Officer of the Ghana National Chamber of Commerce and Industry (GNCCI), Mark Badu Aboagye, has welcomed aspects of the 2025 budget, particularly the removal of the E-Levy and other taxes. But Badu Aboagye has cautioned that certain risks could negatively impact businesses and economic growth.
Reacting to the budget in an interview with The High Street Journal, Mr. Badu Aboagye acknowledged that some of the proposed tax reforms align with concerns previously raised by the Chamber. He commended the government for scrapping the E-Levy, noting that it had placed an undue burden on businesses.
“We have long argued that these levies were counterproductive, as they increased the cost of doing business and discouraged digital transactions. Their removal is a great relief and will ease the financial burden on businesses while promoting financial inclusion,” he stated.
He also welcomed the government’s commitment to reforming the VAT system but expressed concern about the lack of a clear timeline for implementation.
“We have long argued that the structure of our VAT system is not business-friendly and does not even generate the expected revenue due to low compliance. The government has recognized this and promised reforms, but they have not stated exactly when this will happen. That remains a concern,” he added.
The GNCCI CEO further noted that while the government did not introduce new taxes, the increase in the Growth and Sustainability Levy from 1% to 3% for the extractive sector could have implications for industry players. However, he was relieved that it did not extend to the manufacturing sector.
Beyond taxation, Mr. Badu Aboagye warned that the government’s approach to financing the budget deficit—primarily through borrowing from the domestic market—could create a credit squeeze for businesses.
“A major risk we identified is that a significant portion of the budget deficit will be financed locally, meaning the government will borrow more from the domestic market. This will crowd out private sector access to credit, push interest rates higher, and make it more difficult for businesses to expand,” he explained.
Mr. Badu Aboagye also noted that inflation targets set in the budget, such as reducing it to 11.9% by the end of the year, appear overly ambitious given the structural challenges in the economy. While he acknowledged that reducing food inflation is a key strategy, he emphasized that additional measures, including a comprehensive review of monetary and fiscal policies, would be necessary to achieve the target.
Despite the risks, he welcomed the government’s decision to prioritize local procurement, particularly in the sanitary pad manufacturing sector. He urged authorities to ensure that local businesses benefit from such initiatives rather than allowing foreign imports to dominate.
“We need to ensure that the companies producing these goods locally are given the opportunity to grow. It is counterproductive if we end up importing these products while claiming to support local industry,” he added.
While the budget addresses some business concerns, the GNCCI CEO believes more work is needed to ensure a stable and conducive environment for the private sector to thrive. He urged the government to provide clear timelines for tax reforms, manage borrowing carefully, and implement policies that truly empower local businesses.
