2023 Budget: What it Means for the Youth and Entrepreneurs in Ghana

Historically, the focus of budgets has been to ensure that expenditures and revenues are properly authorized; more recently, the budget has been developed as a framework within which complex decisions on the allocation of resources can be made more effectively. The national budget allows the government to regulate the imposition of taxes in various sectors. As well as promote the growth of businesses, enterprises, and trading as they look forward to the government budget to revise their policies accordingly and contribute to the country’s economic prosperity.

According to the International Monetary Fund’s overview of Ghana in September 2022, the inflation rose to 31.7 percent (an 18-year high) in July 2022, from 12.6 percent at the end of 2021. The impact of soaring global commodity prices (Ghana imports 40 percent of its fertilizers from Russia) has been compounded by the depreciation of the cedi which has so far lost 24 percent against the dollar in 2022 (according to the Bank of Ghana data). The Government and the Bank of Ghana (BoG) have sought to dampen inflationary expectations by, respectively cutting expenditures, and raising the monetary policy rate (MPR) to 22 percent and banks’ primary reserve requirements from 12 to 15 percent. Currency depreciation and high inflation have driven up the cost of living, notably for food. This has put considerable strain on household budgets, particularly for the poor who devote more than half of their budget to food. Rural farmers have also been affected by increases in the prices of fertilizer and other inputs. Despite all this, the 2023 Budget allocated 1 percent of the nation’s funds to agriculture. Senator Pat Roberts once said: “Show me a nation that can’t feed itself, and I’ll show you a nation in chaos’.

This is the state of Ghana and it will get worse if nothing is done to improve the situation. The 2023 budget and economic policy of the government have been described as unfriendly to the youth. It failed to prioritize the needs of the youth. The statement said “A country with a youth unemployment rate as high as 12 percent and with 50 percent underemployed cannot pride itself with employment solutions such as the YOUSTART. YOUSTART is said to benefit just a meager 30,000 youth when the youth constitute more than 30 percent of Ghana’s population.” The finance minister admonished the youth of the country to venture into entrepreneurship and seek financial and technical support to develop their businesses from the National Entrepreneurship and Innovative Programme (NEIP). 

The increment of Value Added Tax (VAT) by 2.5 percent would bring it to 15 percent in addition to the already National Health Insurance Levy (NHIL) at 2.5 percent, Ghana Education Trust Fund Levy (GETFL) at 2.5 percent, and the COVID-19 Levy at 1% would not only cripple and collapse businesses that are struggling to survive after the just hit pandemic. These taxes and the profit of the enterprise would then be passed on to the consumers.

The issue of unemployment among the youth is a known problem but the 2023 budget did not address it in any way but worsened the plight of many with the proposed freeze on employment in the public and civil sectors. The government in the budget has declared 0 percent profit for investment and pensions for 2023. Investments that are most likely business capital, and monies for business expansion.

The Ghanaian youth have largely registered their displeasure with the inability of the government to prioritize youth in its planning and budgeting. 


Narkie M. Larnyoh

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