Key proposals outlined for the 2025 budget by the Association of Ghana Industries (AGI) include prioritising macroeconomic stability, streamlining taxes and enhancing access to capital to support business growth.
The 2025 budget will be presented by Minister of Finance and Economic Planning Casiel Ato Forson in March 2025 – and will be first of this new political administration under the aegis of the National Democratic Congress (NDC).
Industry, represented by the AGI, is advocating forward-looking tax reforms, forex stability measures and improved access to capital to drive business growth and investment planning.
AGI’s Chief Executive Officer, Seth Twum-Akwaboah, made this known at its National Council retreat in Accra recently – calling for key indicators of a stable macroeconomic environment, including exchange rate stability, manageable inflation levels and reasonable interest rates to revitalise the economy.
Businesses, he noted, have no control over these factors, making it the responsibility of government and the Bank of Ghana to ensure stability.
However, taxation featured prominently in AGI’s budget proposals with the association highlighting inefficiencies within the VAT system. While the zero VAT policy has been applied to test kits and later extended to sanitary products, other critical sectors such as local manufacturing continue to face unfair competition due to smuggling and tax evasion.
The AGI CEO spoke of the need to streamline the multiplicity of taxes, noting that imported raw materials are taxed at rates as high as 57 percent…. making domestic production costs uncompetitive.
AGI also urged government to ensure that taxes introduced for specific purposes, such as the COVID-19 levy, are abolished once their intended period expires. They also highlighted challenges facing the printing industry – noting that while imported printing materials are taxed, finished imported textbooks remain tax-exempt; again, making local production uncompetitive.
President-AGI, Dr. Humphrey Kwesi Ayim-Darke, also waded into the debate by pressing on the need for energy sector reforms to prevent domestic energy taxation from disproportionately burdening industry.
“We have urged government to implement cross-subsidies in the energy sector, ensuring that domestic taxation on energy bills is rationalised to enhance industrial competitiveness,” he added.
Access to capital for SMEs and various businesses remains challenging because government is in the market borrowing through T-bills, which situation must be addressed, Ayim-Darke stated.
Additionally, AGI emphasises the need for a robust import substitution strategy and stronger support for manufacturing as key components of government’s 24-Hour Economy agenda.
By prioritising domestic production, the country can reduce reliance on imports, strengthen value chains and enhance domestic manufacturers’ competitiveness. To this end, Dr. Humphrey Ayim-Darke believes focus on key sectors such as the poultry value chain, metal fabrication and works, textiles, pharmaceuticals and vegetable oils should lead the way.
Prioritising the development of these sectors will position AGI as a pivotal partner in efforts to reset the economy alongside government, he notes.
The AGI president stated that the 24-hour economy concept presents a unique opportunity to revamp Ghana’s industrial sector. The success of this initiative hinges on a well-structured manufacturing sector aligned with the broader economic restructuring effort.
Discussions also underscored the need for policy reforms to address gaps in domestic tax collection, particularly in the areas of Value Added Tax and import duties which continue to hinder industrial growth.
The National Council meeting focused on how industry can re-strategise and collaborate with government to drive development and growth in the industrial sector.
A former AGI president, Dr. James Asare-Adjei, said indigenous businesses – particularly those in the manufacturing sector – must be prioritised to enable them scale up and compete effectively under the African Continental Free Trade Area (AfCFTA).
The association pledged its commitment to working with government in ensuring effective implementation of the 24-hour economy agenda. This year’s retreat was held under the theme ‘Resuscitating industry to spur growth, fiscal balance, and job creation’.
The two-day event provided an opportunity for the AGI National Council to engage with government officials and policymakers on pressing issues affecting the country’s business environment.
