The 2025 Budget: Opportunities and threats for SMEs – An analysis by NKAKA & partners
Small and Medium Enterprises (SMEs) play a crucial role in Ghana’s economic development, serving as key drivers of job creation, industrial growth, and export potential. According to research, they account for 70% of GDP, 85% of manufacturing, and 92% of registered businesses, making them the backbone of the country’s economy.Ghanaian fashion
Despite their significant contributions, SMEs continue to face several challenges, including limited access to capital, regulatory constraints, unfavorable market conditions, managerial inefficiencies, and underutilization of technology. To address these issues, the government has implemented various initiatives through national budget allocations and policy interventions. Agencies such as MASLOC, Ghana Enterprise Agency, Ghana Export-Import Bank, and Venture Capital Trust Fund have been established to provide financial and technical support to SMEs.
In 2024, the government introduced several policies aimed at fostering SME growth, including the Planting for Food and Jobs (PFJ) program, aquaculture support, and the One District, One Factory (1D1F) initiative. Others are the GhanaCARES and the YouStart. Key financial institutions like Development Bank Ghana, GIRSAL, and Consolidated Bank Ghana were also directed to provide financing and guarantees to small businesses to enhance their access to capital. Additional measures included seed distribution programs, irrigation development, poultry sector support, and infrastructure expansion to strengthen agriculture-based enterprises.
Despite these interventions, SMEs continue to encounter significant hurdles that hinder their growth and sustainability. The 2025 budget, titled “The Big Push,” aims to address Ghana’s economic challenges while revitalizing key sectors. It comes at a critical time, reflecting the government’s commitment to economic recovery, job creation, and inclusive growth.Ghanaian fashion
This article provides an in-depth analysis of the 2025 budget policies and their implications for SMEs, highlighting opportunities and challenges for businesses in the evolving economic landscape.
2 The Economic Outlook and Budget Strategy
Ghana’s 2025 budget presents a cautiously optimistic economic outlook, with projected GDP growth of 4.0% and non-oil GDP growth of 4.8%. While the economy outperformed expectations in 2024, the government is focusing on fiscal consolidation and inflation control, targeting a reduction in inflation from 23.8% in 2024 to 11.9% in 2025. These measures, if successfully implemented, could create a more stable macroeconomic environment for businesses.
Small and medium-sized enterprises (SMEs) remain the backbone of Ghana’s economy, contributing 70% of GDP, 85% of manufacturing, and 92% of registered businesses. Based on these contributions, it is expected that SMEs will play a major role in the 2025 budget projections, contributing approximately 70% of the targeted 4.0% GDP growth and 70% of the projected 4.8% non-oil GDP growth. The performance of SMEs will therefore be central to achieving national economic targets.
The decline in treasury bill rates suggests lower borrowing costs, which could improve SME financing. However, currency depreciation remains a concern, with the cedi losing 19.2% of its value against the US dollar in 2024. If not controlled, continued depreciation could increase import costs, inflationary pressures, and production costs, affecting SME operations.
To maximize opportunities in 2025 and beyond, SMEs must focus on local production, digital transformation, and export diversification. Government support through improved infrastructure, financial inclusion, and regulatory reforms will be crucial to ensuring that SMEs continue to drive economic growth and job creation.
3 Key Policies and Programme Implications
3.1 Expenditure Measures
3.1.1 Public Procurement Amendment
The government’s proposal to amend the Public Procurement Act to require commencement certificates and budgetary provisions for all procurements payable by the central government is a critical fiscal measure aimed at reducing arrears owed to businesses. This policy ensures that government contracts are backed by approved budgets, minimizing unpaid obligations and fostering a more predictable business environment.
Opportunities
The amendment to the Public Procurement Act seeks to enhance fiscal discipline by ensuring that all government procurement contracts are backed by budgetary provisions. This measure aims to reduce unpaid arrears to businesses, particularly SMEs, by preventing excessive spending and aligning procurement with available funds. As a result, payment cycles are expected to shorten, improving cash flow and sustainability for SMEs engaged in government contracts. Additionally, this policy will increase business confidence by providing greater assurance of timely payments, making government procurement more attractive. Ultimately, it promotes financial prudence, enhances transparency, and fosters a more predictable procurement environment.
Challenges
While budgetary provisions ensure planned spending, they do not guarantee timely fund releases, potentially causing payment delays if the government faces liquidity issues. The requirement for commencement certificates may also introduce bureaucratic hurdles, slowing procurement and project timelines. Additionally, SMEs may face exclusion if larger firms with stronger financial capacity dominate government contracts. These challenges could undermine the intended benefits of the policy, limiting its impact on improving cash flow and business confidence for SMEs.
Recommendations
• Link Budgetary Provisions to Actual Cash Releases: The government should establish a clear and enforceable timeline for releasing funds to prevent payment delays.
• Strengthen Cash Flow Forecasting: Implement a realistic cash management strategy to ensure funds are available when commitments are made.
• Support SME Participation: Introduce policies such as priority allocation or early payment schemes to ensure SMEs benefit from government procurement.
• Improve Procurement Efficiency: Streamline bureaucratic processes to avoid delays in awarding contracts while ensuring fiscal discipline.
3.1.2 Cutting “Wasteful” Expenditure
The government’s proposal to cut inefficient or duplicative programs under its fiscal consolidation plan includes eliminating GhanaCARES, YouStart, and One District One Factory (1D1F)—initiatives that previously supported SMEs and startups. While this decision aims to reduce wasteful expenditure, it poses significant implications for small businesses that relied on these programs for financing, capacity building, and market access.
Opportunities
Cutting inefficient programs generally enhances fiscal discipline, reducing the budget deficit and improving economic stability. Savings can be reallocated to more targeted SME financing initiatives. Additionally, SMEs may be encouraged to seek private sector funding, fostering resilience and reducing dependence on government support.
Challenges
The cancellation of SME-focused programs may limit access to financing, training, and market opportunities for businesses. SMEs that had invested in these initiatives could face financial setbacks, disrupting their growth plans. Additionally, job creation efforts may slow, as these programs previously contributed to employment generation.
Recommendations
• Introduce Alternative Support Mechanisms: The government should explore tax incentives, SME loan guarantees, and grants to sustain business growth.
• Strengthen Private Sector Involvement: Encouraging partnerships with banks, venture capital firms, and development agencies can provide alternative funding sources.
• Gradual Phase-Out Approach: Instead of abrupt cancellations, a structured transition plan should be implemented to allow SMEs to adjust and seek alternative support.
3.2 Energy Sector Measures
The proposed Energy Sector Recovery Programme (ESRP) interventions aim to enhance efficiency, reduce system losses, and optimize energy costs. These measures could have significant implications for SMEs, particularly regarding their operational costs and financial stability.
Opportunities
The shift from liquid fuel to natural gas is expected to lower electricity generation costs, potentially reducing tariffs and easing SMEs’ financial burdens. Improved metering, reduced system losses, and enhanced revenue collection could lead to a more stable power supply, minimizing operational disruptions. Additionally, renegotiated Independent Power Producer (IPP) charges may result in more predictable energy costs, allowing SMEs to plan and allocate resources more effectively. These measures could enhance business sustainability by reducing energy-related uncertainties and improving overall profitability.
Challenges
While energy cost reductions are expected, the extent of tariff benefits for SMEs remains uncertain, and short-term price adjustments may occur. The introduction of Private Sector Participation (PSP) in revenue collection could lead to stricter enforcement on overdue payments, posing challenges for SMEs with cash flow constraints. Additionally, the transition period for implementing these reforms may cause temporary disruptions or inconsistencies in energy supply before full benefits are realized. SMEs must prepare for potential short-term challenges while positioning themselves to take advantage of improved efficiency and reliability in the long run.
Recommendations
• Transparent Tariff Adjustments: The government should ensure that cost reductions from fuel swaps and IPP renegotiations directly translate into lower electricity tariffs for SMEs.
• Support for Energy Efficiency Investments: SMEs should be incentivized to adopt energy-efficient technologies, such as solar power and energy-saving equipment, to further reduce operational costs.
3.3 Revenue Measures
3.3.1 Abolishment of Levies and Taxes
The government’s proposal to abolish these taxes aims to ease the financial burden on businesses and households. For SMEs, these changes present both opportunities and challenges that could impact their operations, cash flow, and cost structure.
Opportunities
The removal of the 1% E-Levy will lower digital transaction costs, encouraging SMEs to adopt electronic payments, enhancing financial inclusion and efficiency. Abolishing the Emission Levy will reduce compliance costs for industries and vehicle owners, easing operational expenses. Additionally, since VAT on motor vehicle insurance was never implemented, its abolition prevents added insurance costs, ensuring SMEs maintain better cash flow and manageable transport-related expenses. These measures collectively improve the cost structure for SMEs, enabling them to operate more efficiently and reinvest savings into business growth.
Challenges
The removal of these taxes may reduce government revenue, potentially affecting funding for SME support programs and infrastructure development. To compensate, alternative tax measures could be introduced, which may indirectly impact SMEs. Additionally, eliminating the Emission Levy could weaken incentives for businesses to adopt sustainable practices, leading to potential long-term environmental costs. While these tax cuts ease financial burdens on SMEs, they also raise concerns about fiscal sustainability and environmental responsibility, requiring a balanced approach to policy implementation.
Recommendations
• Encourage Digital Payments Adoption: The government should promote digital transactions by integrating incentives such as reduced transaction costs for SMEs adopting cashless payments.
• Promote Green Business Practices: Introduce voluntary sustainability incentives for SMEs to encourage environmentally friendly practices despite the removal of the Emission Levy.
3.3.2 Reducing Port Taxes and Charges
The government’s decision to review and potentially remove certain port taxes and fees aims to ease the cost burden on businesses, boost tax compliance, and support economic growth. However, while this policy presents opportunities for SMEs, it also comes with challenges that must be carefully managed.
Opportunities
Reducing port charges will lower the cost of importing raw materials, making local manufacturing more cost-effective and improving SMEs’ profit margins. This reduction will enhance the competitiveness of SMEs by allowing them to price their goods more competitively against imported finished products. Additionally, the lower import costs can support business expansion, enabling SMEs to reinvest in productivity improvements and create more employment opportunities. Overall, this policy has the potential to drive SME growth, boost local production, and strengthen the economy by reducing financial constraints on small businesses.
Challenges
Lower port charges may increase competition from imported finished goods, potentially challenging locally produced SME products. Additionally, reduced port-related revenues could impact government funding for SME-support programs and infrastructure development. The implementation process may also face delays and bureaucratic inefficiencies, postponing the expected benefits for businesses. While the policy aims to reduce costs for SMEs, its success will depend on balancing import advantages with measures to support local production and ensuring a smooth, timely implementation process.
Recommendations
• Implement a Balanced Approach: While reducing port charges, the government should ensure that local manufacturers remain competitive against imported finished goods through strategic trade policies.
• Support Local SMEs with Incentives: Introduce complementary policies such as tax breaks or subsidies for SMEs to enhance their production capacity and competitiveness.
• Ensure Transparent and Timely Implementation: Streamline the review process to ensure that SMEs quickly benefit from reduced charges, improving their ability to plan and invest.
3.3.3 Revenue Mobilization Measures
To enhance revenue mobilization, the government aims to strengthen tax compliance through digitization, extend the Voluntary Disclosure Programme (VDP), and eliminate VAT exemptions on non-life insurance (excluding motor policies). These measures seek to broaden the tax base, improve efficiency, and increase government revenue. However, their impact on SMEs will depend on implementation effectiveness and potential cost implications.
Opportunities
The digitized tax system and USSD payment method will simplify tax filing for SMEs, reducing administrative burdens and encouraging compliance. The Voluntary Disclosure Programme (VDP) offers debt relief by waiving penalties and interest, enabling SMEs to regularize their tax status without financial strain. Additionally, enhanced tax collection could generate more revenue for public services, leading to improved infrastructure and business support programs that indirectly benefit SMEs. These measures aim to create a more efficient tax system while fostering a conducive business environment for small and medium enterprises.
Challenges
The transitioning to digital tax systems could pose challenges for businesses with limited technological access or financial literacy. While the Voluntary Disclosure Programme (VDP) offers relief to SMEs with tax arrears, already compliant businesses may see no direct benefits, potentially leading to concerns about fairness. These challenges highlight the need for balanced implementation to ensure SMEs can adapt while maintaining financial sustainability.
Recommendations
• Provide Training & Support – Government should offer digital tax education and assistance to help SMEs transition smoothly to the new tax system.
• Strengthen SME Incentives – To offset tax burdens, the government should introduce targeted incentives, such as tax credits for SMEs investing in digital tools or compliance systems.
3.3.4 Reduction in Tax Refund Account
The government’s reduction of the tax refund rate from 6% to 4% aims to boost revenue and prevent fund misuse. However, SMEs may face challenges due to existing administrative barriers, VAT structures, and limited expertise in claiming refunds. While the policy enhances fiscal discipline, it could reduce cash flow relief for businesses.
Opportunities
Reducing the tax refund rate boosts government revenue, enabling increased investment in infrastructure and SME-support programs. It also enhances transparency by curbing misuse in the tax refund system, ensuring funds serve legitimate claims. Additionally, the policy may drive future reforms to address inefficiencies, improving accessibility and fairness in tax refunds for SMEs.
Challenges
Lowering the tax refund rate may reduce SMEs’ cash flow, as many depend on refunds to recover excess VAT paid on inputs. Some SMEs already face difficulties in claiming refunds due to administrative complexities and VAT structures that restrict eligibility. The reduction may worsen their ability to recover overpaid taxes. Additionally, if businesses perceive the tax system as unfair or difficult to navigate, it may discourage compliance, potentially leading to lower tax filings and increased informality in the sector.
Recommendations
• Improve SME Access to Refunds – Government should simplify the tax refund process and provide technical support to SMEs to help them claim eligible refunds.
l• Introduce Targeted Refund Mechanisms – A portion of refunds should be reserved specifically for SMEs, ensuring that they are not disproportionately affected by the rate reduction.
• Strengthen Taxpayer Education – Government should invest in training and awareness programs to educate SMEs on tax compliance, refund procedures, and financial record-keeping to maximize eligible claims.
3.3.5 Aggressive and Sustained Tax Education
The government’s plan to enhance tax education and initiate quarterly dialogues between tax authorities and businesses aims to improve SME tax compliance, which currently stands at less than 30%. While this initiative has the potential to boost revenue mobilization and create a more transparent tax environment, its success will depend on effective execution.
Opportunities
Enhancing tax education and introducing quarterly dialogues will improve SMEs’ understanding of tax obligations, reducing unintentional non-compliance and penalties. Strengthened engagement between the government and SMEs will provide a platform for addressing tax-related concerns, leading to business-friendly policy adjustments. Increased awareness is expected to boost compliance, allowing SMEs to avoid penalties and access formal sector benefits such as credit and government support programs. Ultimately, these measures aim to create a more transparent tax environment, fostering voluntary compliance while ensuring that SMEs operate within the formal economy.
Challenges
SMEs may face higher compliance costs, adding financial and administrative burdens, particularly for those with limited resources. Aggressive enforcement measures could result in excessive audits and penalties, discouraging voluntary compliance. While quarterly tax dialogues provide a platform for addressing business concerns, translating discussions into effective policy reforms may take time, delaying tangible benefits. Balancing enforcement with supportive measures will be key to ensuring SMEs comply without undue hardship.
Recommendations
• Simplify Tax Processes – The government should introduce SME-friendly tax filing systems, including mobile and digital platforms, to ease compliance.
• Incentivize Compliance – Offering tax incentives, such as reduced rates for compliant SMEs, can encourage voluntary participation in the tax system.
• Ensure Transparent Communication – Clear, consistent, and accessible tax education campaigns should be implemented to reach SMEs in both urban and rural areas.
3.3.6 VAT Reforms
The government’s proposed VAT reforms aim to address inefficiencies in Ghana’s tax system by reducing distortions, easing tax burdens on businesses and households, and improving compliance. The key measures include abolishing the COVID-19 Levy, reversing the decoupling of GETFund and NHIL from VAT, reducing the effective VAT rate, and revising the VAT flat rate regime. These changes have significant implications for SMEs, affecting their cost structures, compliance obligations, and competitiveness.
Opportunities
The proposed VAT reforms will reduce the financial burden on SMEs by lowering the effective VAT rate and allowing input tax claims for levies, improving cash flow and profitability. Streamlining VAT regulations, including reversing the flat rate regime and integrating GETFund and NHIL into VAT, will simplify compliance and reduce administrative challenges. Additionally, raising the VAT registration threshold will exempt micro and small businesses from VAT collection, lowering compliance costs and encouraging formalization. These measures aim to create a more business-friendly tax environment, fostering SME growth and improving overall tax compliance.
Challenges
The VAT reform introduces uncertainty for SMEs as reliance on IMF recommendations and consultations may delay implementation, making financial planning challenging. While the reforms aim to simplify compliance, businesses may need to adjust accounting systems and filing procedures, incurring transition costs. Additionally, reducing VAT rates could lower government revenue, potentially leading to alternative tax measures that may impact SMEs. The reversal of the flat rate and allowance for input tax claims also appear inconsistent with the tax refund account reduction, as it could increase refund claims without clear mitigation strategies, potentially straining government resources.
Recommendations
• Clear Implementation Roadmap – The government should establish a well-defined timeline for VAT reforms to provide SMEs with certainty and allow for proper financial planning. Regular updates and stakeholder engagement will ensure a smooth transition.
• Support for Compliance Adjustments – SMEs should be provided with technical assistance, training, and digital tools to help them adapt to the new VAT system. This will ease compliance burdens and minimize disruptions.
• Balanced Revenue Strategy – To mitigate potential revenue shortfalls, the government should strengthen tax administration efficiency, expand the tax base, and ensure a fair and transparent refund process to balance increased claims with sustainable public finances.
3.4 Transformative Initiatives
3.4.1 Domestic Credit Rating Agency
The establishment of the Domestic Credit Rating Agency Ghana (CRAG) aims to create a structured credit assessment framework for financial institutions, fostering transparency, risk-based lending, and equitable debt pricing. For SMEs, access to capital remains a major challenge, often due to limited credit history and perceived high risk by lenders.
Opportunities
The establishment of a standardized credit rating system will enhance SMEs’ access to capital by providing lenders with better tools to assess creditworthiness. Risk-based lending will enable SMEs with strong ratings to secure financing at competitive interest rates, reducing borrowing costs and supporting business expansion. Additionally, the framework will encourage SMEs to maintain proper financial records and adopt sound governance practices, improving their financial discipline and long-term sustainability.
Challenges
Limited financial records may result in poor ratings or exclusion for many SMEs, particularly those in the informal sector. Risk-based lending could also lead to credit rationing, where SMEs with lower ratings face higher interest rates or restricted access to financing. Additionally, compliance with the new credit rating framework may impose administrative costs on SMEs, requiring them to invest in better financial management practices. While the initiative aims to improve access to capital, its effectiveness will depend on ensuring inclusivity and minimizing the burden on smaller businesses.
Recommendations
• Capacity Building for SMEs – Provide training and technical assistance to SMEs on financial management, record-keeping, and credit assessment processes to improve their ratings and access to capital.
• Gradual Implementation with Incentives – Phase in the rating system gradually and offer incentives, such as lower compliance costs or subsidized interest rates, for SMEs that improve their ratings over time.
• Incorporating Alternative Credit Assessment Methods – Encourage the use of non-traditional credit assessment tools, such as transaction history, supplier relationships, and tax compliance records, to ensure SMEs without formal financial statements are not excluded from the system.
3.4.2 The $10b “Big Push” Infrastructure Development
The government’s “Big Push” policy aims to drive economic transformation and job creation through strategic infrastructure development, including roads and other key projects.
Opportunities
Infrastructure development under the “Big Push” policy will enhance accessibility, reduce transportation costs, and improve market reach for SMEs. The construction sector will create employment opportunities and open contracts for local businesses, including suppliers and transport service providers. Additionally, improved infrastructure will attract investment, stimulate trade, and create a more conducive business environment for SMEs to expand and compete effectively. In the long term, these developments will contribute to sustainable economic growth, strengthening the overall business ecosystem and enhancing productivity across various sectors.
Challenges
The 2024 allocation for the “Big Push” initiative stands at GHS 13.85 billion, representing less than 10% of the total promised investment of $10 billion. At this pace, full implementation could take a decade, raising concerns about the program’s sustainability and its timely economic impact. Delays in disbursement may extend project timelines, postponing anticipated benefits for SMEs. Additionally, Poorly managed construction projects could disrupt businesses along construction sites, leading to revenue losses or closures. Additionally, the gap between promised and allocated funds raises concerns about the sustainability and timely completion of projects, potentially undermining economic transformation goals. Without effective planning and mitigation measures, SMEs may struggle with prolonged uncertainties, limiting their ability to capitalize on infrastructure improvements in the short term. The disparity between committed and allocated funds further threatens the initiative’s viability, creating uncertainty for SMEs and limiting their ability to leverage infrastructure improvements in the short term.
Recommendations
• Accelerate Funding and Execution – Government should explore alternative funding sources, including public-private partnerships (PPPs), to speed up project completion.
• Mitigation Plans for SMEs – Implement business continuity plans, such as compensation packages or alternative trading locations, for SMEs affected by construction activities.
• Transparent Project Management – Establish strict timelines, monitoring mechanisms, and stakeholder engagement strategies to ensure efficient project execution and minimal disruptions.
3.4.3 Agriculture for Economic Transformation Agenda (AETA)
The Government of Ghana has replaced the Planting for Food and Jobs (PFJ) initiative with the Agriculture for Economic Transformation Agenda (AETA), allocating GHS 1.5 billion in 2025. AETA is designed to modernize agriculture, promote agribusiness, enhance food security, and reduce import dependency. Key programmes include Feed Ghana, Transformational Grains Development, Vegetable Development (YƐREDUA), Livestock Development, Nkoko Nkitinkiti, and infrastructure such as Farmers’ Service Centres and mini processing plants.
Opportunity
The Agriculture for Economic Transformation Agenda (AETA) presents significant opportunities for SMEs operating within the agricultural value chain. The programme is expected to stimulate expanded agribusiness prospects, particularly for SMEs involved in input supply, logistics, agro-processing, and distribution, by creating increased demand for agricultural goods and services. Through contract farming arrangements and anchor schemes—such as the “Poultry Farm to Table” initiative and the distribution of seeds and inputs—agro-based SMEs are likely to gain reliable market access and long-term supply agreements.
In addition, the establishment of Farmers’ Service Centres across all regions will provide SMEs with access to modern equipment, affordable agricultural services, and technical support, helping to lower operational barriers and improve productivity. Moreover, the AgriNext programme, which facilitates access to land banks and links graduates to agribusiness opportunities, has the potential to support youth-led SMEs and drive innovation in the sector. These interventions collectively aim to create a more enabling environment for SME growth, value addition, and sustainable job creation within the agriculture ecosystem.
Challenges
Despite its potential, the Agriculture for Economic Transformation Agenda (AETA) faces key challenges that may limit its impact on SMEs. One major concern is the inequitable access to programme support. Without transparent and inclusive implementation mechanisms, there is a risk that support could be skewed in favor of politically connected or urban-based SMEs, leaving out informal or rural enterprises that often need assistance the most.
Additionally, capacity and infrastructure gaps pose a significant barrier. Many SMEs may lack the technical know-how, managerial skills, or operational infrastructure required to fully leverage the programme’s offerings, such as mechanization services or input credit schemes.
Delayed implementation of critical interventions—such as the delivery of seeds, fertilizers, and equipment—due to bureaucratic inefficiencies could disrupt agricultural cycles and limit productivity, ultimately affecting SME operations and profitability.
Furthermore, there are sustainability risks linked to the programme’s long-term success. The absence of clearly defined exit strategies or reliable long-term funding mechanisms may undermine the continuity of support, especially if future administrations shift priorities or if budget constraints arise. These challenges must be addressed to ensure that the programme achieves its intended transformative impact on SMEs.
Recommendations:
• Transparent Selection and Targeting – Establish clear, merit-based criteria for participation in all interventions to ensure inclusivity.
• Capacity Building – Embed technical and financial training within the programme to strengthen SME readiness and resilience.
• Public-Private Partnerships (PPPs) – Engage private sector actors in seed production, machinery leasing, and processing to ensure scalability.
• Monitoring and Evaluation – Develop strong M&E mechanisms to track implementation, measure impact, and inform timely policy adjustments.
3.4.4 Government Social Protection Programmes
Government has announced significant increases in funding for major social protection programmes in 2025, including LEAP (GH¢953.5 million), School Feeding (GH¢1.788 billion), and the Capitation Grant (GH¢145.5 million). The aim is to cushion vulnerable households against inflation and improve access to basic services. This enhanced social spending presents an opportunity to integrate SME participation through localized procurement and structured market linkages.
Opportunities
The expansion in social protection spending presents a significant opportunity to stimulate local enterprise development. By delivering a portion of LEAP benefits through redeemable coupons, the government can drive sustained demand for Made-in-Ghana goods, creating consistent market access for local producers. This mechanism could incentivize local consumption while directly supporting domestic manufacturing and agro-processing.
Additionally, SMEs engaged in food processing, textiles, and fast-moving consumer goods (FMCG) can be integrated into supply chains for programmes such as School Feeding and Free SHS, supplying essential goods like food, uniforms, and educational materials. Linking agricultural initiatives like AETA to these programmes can further boost local production, ensuring that the increased social spending drives inclusive economic growth.
Challenges
Despite the opportunities, several challenges could limit the impact of these social protection programmes on local SMEs. Many SMEs struggle with weak supply chain infrastructure, making it difficult to meet the quality, volume, and consistency required for large-scale government contracts. Informal SMEs, in particular, often lack the necessary registration, certification, or technical capacity to qualify for procurement opportunities under programmes like School Feeding and Free SHS.
Furthermore, procurement leakages, poor targeting, and potential corruption can undermine the intended local economic benefits. For example, contracts for uniforms, canned foods, and other non-perishable items are frequently awarded to importers of foreign goods, especially from China. This not only diverts job creation abroad but also fosters a preference for foreign products among Ghanaian youth, undermining efforts to promote Made-in-Ghana goods.
Recommendations
• Strengthen Local Supply Chains: Government should invest in SME capacity building, particularly in quality assurance, logistics, and production planning, to enable them to meet procurement standards under social programmes.
• Inclusive Procurement Frameworks: Simplify registration and certification processes to allow qualified informal and small businesses access to government contracts, while reserving a quota of supply contracts for Made-in-Ghana producers.
• Link Social Programmes to Local Production: Integrate initiatives like AETA into school feeding and LEAP programmes by prioritizing the procurement of locally sourced and processed food items, textiles, and other inputs.
• Transparent Contracting and Monitoring: Enforce transparency and accountability in procurement processes to reduce leakages, ensure fair competition, and drive real economic impact to SMEs.
• Promote Local Content in Youth-Focused Programmes: Prioritize local manufacturers in the supply of non-perishables, such as school uniforms and canned foods under the Free SHS programme, to create jobs and shift consumption preferences toward Ghanaian products.
• Support Import Substitution through Strategic Engagement: The Ministry of Trade and Industry and the Ghana Investment Promotion Center should engage with major importers—particularly those supplying to government programmes—to collaborate with the Association of Ghana Industries (AGI). These importers should be supported through incentives and technical assistance to re-engineer their business models and establish local manufacturing operations. This will facilitate technology transfer, enhance industrialization, and reduce dependence on imports over time.
3.4.5 Women’s Development Bank
The Government of Ghana has proposed the establishment of a Women’s Development Bank (WDB) with a seed funding of GH¢51.3 million. The bank is intended to provide low-interest loans and tailored financial services to support women-owned and women-led businesses. This initiative aims to address gender-specific barriers in access to finance and promote inclusive economic growth.
Opportunities
The establishment of the Women’s Development Bank presents notable opportunities for women-led SMEs in Ghana. By offering flexible and affordable financing options, the bank is poised to ease access to capital, enabling women entrepreneurs to expand their businesses and scale operations.
In addition to funding, the provision of tailored financial services—such as savings products, credit facilities, and advisory support—will help women-owned enterprises build resilience and long-term sustainability.
More broadly, this initiative has the potential to promote financial inclusion by addressing gender-specific barriers in the financial sector, empowering more women to actively participate in and contribute to national economic development.
Challenges
The Women’s Development Bank faces several potential challenges that may hinder its effectiveness. One concern is the limited seed capital of GH¢51.3 million, which may be insufficient to meet the widespread demand for financial support, potentially leading to early underperformance.
Additionally, there is a risk of overlap with existing institutions such as GEA, MASLOC, GEXIM, and DBG, which could reduce the overall efficiency and impact of the initiative.
Furthermore, ensuring nationwide accessibility, particularly in rural areas, and designing truly flexible and inclusive financial products that cater to the diverse needs of women entrepreneurs may present significant implementation challenges.
Recommendations
• Strengthen Collaboration: Align the WDB’s operations with existing institutions like GEA and DBG to avoid duplication and leverage existing infrastructure.
• Scale-Up Funding: Mobilize additional capital through public-private partnerships, donor support, and bond issuance to deepen outreach.
• Targeted Capacity Building: Complement financial support with business development services, including training, digital literacy, and mentorship.
• Leverage on Existing Institutions and Technology: Leverage on existing institutions such as the Ghana Post Offices and GCB Bank, which have an extensive network across the country. Additionally, integrating digital platforms and mobile banking can significantly expand access to underserved women entrepreneurs, particularly in rural areas.
• Monitor and Evaluate Impact: Establish transparent monitoring systems to track impact, efficiency, and feedback from beneficiaries.
3.4.6 “Adwumawura”
The 2025 Budget introduces the “Adwumawura” programme, a government initiative aimed at facilitating the creation, tracking, and mentoring of a minimum of 10,000 businesses, particularly focusing on young entrepreneurs. With an allocation of GH¢100 million, the programme will be implemented by the Ministry of Youth Development and Empowerment through the National Entrepreneurship and Innovations Programme (NEIP). This programme is designed to provide training and working capital to youth-led SMEs, aiming to empower young entrepreneurs and stimulate job creation.
Opportunities
The “Adwumawura” programme offers significant opportunities for youth-led SMEs. First, it provides access to capital, addressing one of the primary challenges for young entrepreneurs – securing funding. This support will enable youth-led businesses to overcome financial barriers and scale operations.
Second, the programme offers entrepreneurship training and mentorship, which will equip young entrepreneurs with the essential skills, knowledge, and guidance needed to manage and grow their businesses successfully.
Lastly, the initiative has the potential to foster job creation, as the growth of youth-led SMEs can lead to the generation of employment opportunities, contributing to the broader economic development of the country.
Challenges
The “Adwumawura” programme faces several key challenges that must be addressed for its success. First, previous programme failures such as YouStart have been criticized for underperformance, primarily due to the programme’s inability to integrate with the start-up ecosystem by collaborating with private sector-led incubators and accelerators for proper mentorship and growth tracking. If this issue is not resolved, the Adwumawura programme risks facing similar inefficiencies.
Second, the programme may suffer from inadequate monitoring and tracking, which could result in misuse of funds and a failure to identify struggling businesses that need targeted support.
Third, limited access to markets remains a significant hurdle, as youth-led SMEs often have difficulty penetrating established markets, which could restrict their potential impact.
Lastly, capacity gaps in technical and managerial skills are prevalent among many young entrepreneurs, making it difficult for them to fully benefit from the support provided, especially when it comes to managing and scaling their businesses effectively.
Recommendations:
• Integration with Private Sector Incubators and Accelerators: Partner with private-sector start-up incubators and accelerators to provide mentorship, networking, and market access, ensuring youth entrepreneurs are embedded in a growth-supportive ecosystem.
• Strengthened Monitoring and Tracking Systems: Implement a robust monitoring framework using digital tools to track fund usage and business performance, enabling early intervention for struggling businesses. For instance, sign all beneficiaries unto a simplified digital accounting platform for proper records and tracking of transactions.
• Facilitate Market Access: Create platforms such as trade fairs, online marketplaces, and partnerships with retail outlets to help youth SMEs expand their market reach locally and internationally.
• Capacity Building Programs: Collaborate with business schools and other educational institutions to offer tailored and industry-relevant training in business management, financial literacy, and scaling operations.
• Collaboration with Financial Institutions: Work with financial institutions, such as Venture Capital and Trust Fund to provide flexible financing options, including equity funding and lower interest rates, alongside financial literacy programs.
• Post-Launch Support: Post-Launch Support: Collaborate business-based organisations such as AGI to offer continuous mentorship an networking to help young entrepreneurs manage growth and overcome challenges.
4 Conclusion
The 2025 Budget offers a cautiously optimistic outlook for SMEs in Ghana. With the right policy mix, dedicated implementation, and private sector collaboration, SMEs could become the engine that powers Ghana’s post-COVID recovery and long-term economic transformation. However, the gap between policy intent and execution remains a major hurdle. Government, civil society, and private actors must work in tandem to ensure that the opportunities outlined in this budget are not lost to bureaucracy and inertia.
The authors, led by Kofi Ayisi Aboagye, are from the Research and Policy Team at NKAKA & Partners, a consulting firm specialized in financial services, accounting services, policy and economic research, and SME development.