Budget Statement 2025: Implications for Personal Finances

Ghana’s 2025 Budget Statement arrived with high anticipation – it is the first full-year budget of a new administration, and Ghanaians are keen to know “What does it mean for my pocket?” This analysis breaks down the budget’s key measures and economic trends and translates them into practical implications for different groups: salaried workers, business owners, and informal traders. Consider it a financial survival guide for the year, served with the familiar Ghanaian frankness (and a dash of humor) that we use when talking about money. The big picture: the budget emphasizes fiscal consolidation (tightening government spending and raising revenue) while trying to ease cost-of-living pressures. Now, let’s unpack how that will affect your personal finances in 2025.

Incomes and Inflation – “Real” Salary Matters: First, let’s talk income. The government announced a 10% increase in the national daily minimum wage for 2025. Public sector workers similarly saw a 10% salary adjustment at the start of the year. If you are a salaried worker, you likely noticed that bump in your January payslip. Any raise is welcome, but one must consider inflation. Ghana’s inflation, while slowing, remains around 22-23% as of early 2025 (down from the heights of 50%+ in 2022). This means the prices of goods and services are still rising, just at a slower rate. So, a 10% pay hike against ~22% inflation means real purchasing power could shrink if inflation isn’t tamed further.

In practical terms, you might find that even with a raise, your weekly market shopping costs more than it did last year. Example: a loaf of bread that was GH¢10 last year might be GH¢12 now – that’s a 20% increase. To cope, it’s important to budget wisely. Consider negotiating for any available allowances or bonuses at work to supplement your base pay. On the bright side, the budget projects inflation will continue to decline into the teens by end of 2025 (part of the consolidation plan) which, if achieved, will ease pressure on wallets by mid-year.

Also, if you have any savings, note that interest rates on treasury bills and fixed deposits have been very high (the 91-day T-bill was around 28% in Jan 2025). High inflation drove those rates up, but now as inflation eases, rates may gradually fall. It’s a good idea to lock in some of those high rates while you can – investing in a 1-year government bond at ~30% yield early in 2025 could outpace inflation and give you a real return, helping your money grow rather than erode.

Conversely, avoid taking expensive loans right now: bank lending rates are still above 35-40%, so financing a car or business with a loan will mean huge interest costs. If the budget’s consolidation succeeds, we might see the central bank cut interest rates later in 2025, making borrowing slightly more affordable – perhaps a reason to defer any non-urgent loans to the latter part of the year.

Tax Changes – Who Pays What: The 2025 budget came with significant tax policy shifts, largely fulfilling campaign promises to alleviate certain taxes on individuals and SMEs. One of the biggest changes for everyday finances is the elimination of the E-Levy (Electronic Transfer Levy) on mobile money transactions. If you frequently send MoMo or pay via MoMo, you no longer have that 1% levy eating into your transfers. For example, sending GH¢200 to your mother in the village used to incur a GH¢2 levy (previously even GH¢3 when it was 1.5%). Now it’s zero.

Over a month, those savings add up – essentially a bit more money stays with you each time you use mobile money. That’s a direct gain for everyone from salaried workers supporting family to market traders paying suppliers via MoMo. The “COVID-19 Health Recovery Levy” – an extra 1% VAT that was introduced during the pandemic – has also been scrapped. This should slightly reduce the cost of VAT-able goods. VAT on most items was effectively around 19.25%; with that 1% off, it’s now about 18.25%. The difference might not be huge on a single purchase (GH¢1 less on a GH¢100 grocery basket), but across a year of spending, it helps. Another noteworthy removal: the 15% VAT on residential electricity that caused an uproar when it was imposed at the start of 2024 was suspended after protests.

The new budget confirms it’s not being reintroduced (the government wisely heeded organized labour’s “we won’t pay” ultimatum). For households, this means your electricity bills won’t carry that extra VAT line. However, do note that electricity tariffs themselves rose by 14.7% in Q2 2025 as part of periodic adjustments. So, you might still see higher ECG bills – but at least it’s due to tariff adjustment, not a new tax. For the average family, it reinforces the need for energy conservation (use those LED bulbs and iron clothes in bulk to optimize usage!).

If you’re a small business owner or trader, the budget had mixed news. On one hand, the scrapping of nuisance taxes like the e-levy and reduction of some import levies (emissions levy was removed) can lower some operating costs. GUTA, the traders’ association, applauded removal of the emissions levy as it was inflating import costs on items like used cars and equipment. With its removal, importers could see modest cost reductions, hopefully passed on to consumers or at least improving traders’ margins. On the other hand, the government signaled a drive to broaden the tax net – meaning more enforcement on those not paying taxes properly. For informal traders who mostly operated off the books, expect greater pressure to register and pay at least small business income tax or presumptive taxes.

The budget’s revenue targets assume that while rates weren’t increased, compliance will improve. AGI’s Tsonam Akpeloo emphasized bringing the informal sector into the tax net so that “those who pay don’t get over-targeted”. Practically, this could mean if you run a sole proprietorship that isn’t filing taxes, you might get a knock – perhaps through the new Taxpayer Unique Identifier (Ghana Card PIN now TIN) system which the GRA will leverage. It’s wise to start keeping basic records and be prepared to either file or pay a token presumptive tax to stay compliant, thereby avoiding penalties.

For investors and savers, tax-wise nothing drastic changed in 2025: no new capital gains taxes were introduced, and interest income tax remains at 8% final withholding (still relatively low, meaning fixed-income earnings are attractive especially in this high-rate environment). The budget did indicate the government’s intent to restructure and manage debt carefully. If you hold government bonds, be aware that Ghana went through a domestic debt restructure in 2023; the 2025 budget commits to honoring new terms, and improving fiscal health should increase confidence that your bond interest will be paid (albeit some at reduced rates per the restructure terms). In essence, the budget’s consolidation focus aims to stabilize the economy, which, if successful, should lead to a more stable cedi and lower inflation – benefitting savers by preserving value.

Cost of Living – Price of Essentials: Let’s turn to everyday expenses. Food prices, fuel, transportation, and utilities form the crux of living costs. The budget doesn’t control world market prices, but it outlines policies affecting these. Good news: food inflation has started to ease, dropping to about 23% in early 2025 from much higher levels. This is attributed to better harvests and some currency stability.

The budget allocated GH¢1.5 billion to an “Agriculture for Economic Transformation Agenda” focusing on boosting local food production. While that’s long-term, in the short term it suggests the government may continue programs like Planting for Food and Jobs to keep food supply up and prices stable. If you noticed tomatoes and plantain cost a bit less in late 2024 than mid-2024, that trajectory should hopefully continue, barring any droughts. Still, keep an eye on fuel prices: Ghana’s largest import is refined petroleum, and the budget admits import substitution won’t immediately cover that (no local refinery output yet). Thus, fuel prices will track the cedi exchange rate and global oil.

The cedi has been relatively stable around GHS 15:$1 in early 2025. The budget’s success in consolidating finances – along with the IMF program Ghana is under – aims to maintain or strengthen the cedi. A stable cedi means fuel price stability, which in turn stabilizes transport fares and food distribution costs. So far in 2025, we haven’t seen the wild pump price hikes of 2022. If you’re budgeting, you might assume modest fuel price changes quarter to quarter, rather than the doubling we saw earlier. As a driver, you’ll benefit indirectly from any sustained currency stability.

Utilities:

We touched on electricity – tariffs went up ~15% in Q2 due to PURC’s review (mainly reflecting currency and generation cost changes). Water tariffs up ~4% at the same time. The budget did not announce new subsidies for utilities, meaning we should brace for continued quarterly adjustments. Manage personal finances by anticipating that your ECG and Ghana Water bills might creep up a bit each quarter (perhaps single-digit percentage increases if inflation and forex are stable). The removal of VAT on electricity softens the blow for moderate household consumption. Also, the budget extended the lifeline tariff protection for low-income households – if you use very low power (e.g., single room with a bulb and phone charger), you stay in the lifeline band and the government ensures that rate is kept affordable.

Interest Rates and Loans

For those with existing loans, 2025 might finally bring some respite. In 2023-2024, Bank of Ghana’s policy rate hikes drove lending rates to eye-watering levels (often 35-40%). The budget’s projection of single-digit inflation in a couple of years implies interest rates should gradually fall. Already by April 2025, the trend of inflation was downward, though still high. If you have an adjustable-rate loan, keep an eye on BoG’s moves; they might start cutting the policy rate in the second half of 2025 if inflation sharply declines. That could reduce your monthly loan payments marginally. Conversely, if you plan to borrow, you might wait until late 2025 to see if rates ease a bit, unless it’s urgent.

Savings and Investments

The budget and economic policy also affect how you might allocate savings. With aggressive fiscal tightening, government domestic borrowing may reduce, which could lower future treasury yields. It might be smart to lock into longer-term instruments early in 2025 when rates are still elevated (e.g., a 2-year bond at 30%+). However, always balance against liquidity needs. The cedi’s stabilization (the budget expects gross international reserves to cover 3 months of imports in 2025) suggests the cedi might not wildly depreciate like in 2022. So holding money in cedi investments is less risky than before, though some folks still like to keep part of savings in USD or gold as a hedge. Gold prices are high; note the budget doesn’t specifically address the gold-for-oil program continuation, but that was an initiative to reduce forex pressure on fuel – any success there indirectly helps personal finance through stabilizing fuel cost.

Sector-specific impacts

If you are in certain roles – e.g., a vehicle owner, gambler, or importer – there are niche points: The budget scrapped the betting winnings tax that was controversially introduced. So if you occasionally stake bets or lottery, your winnings won’t be taxed at 10% as originally planned. (The youth actually protested that “NDC promised to repeal the 10% betting tax, and they did”, which they indeed fulfilled.) That keeps more small change in pockets of young punters, though one might cheekily say – perhaps use those extra cedis to save or invest rather than roll back into more bets! For vehicle owners, aside from fuel, note that the vehicle emission levy (which was a fee on vehicle registration/insurance for environmental reasons) was removed. Car insurance itself might not drop because that levy removal might be offset by inflation adjustments, but at least one less fee is an ease.

Practical Tips for 2025

Given the budget’s implications, here are some tips across different groups:

Salaried Workers

Adjust your monthly budget to account for still-high inflation in H1. Use your pay raise wisely – perhaps allocate a portion to an investment that yields above inflation (T-bill or high-interest savings) to preserve value. Look out for any tax reliefs you qualify for – the personal income tax bands did not change significantly in the budget, but ensure you’re claiming reliefs (child education, elderly parent support, etc.) if eligible to reduce PAYE tax. Continue any SSNIT or Tier 3 contributions; the budget’s consolidation means government relies on us to do more personal saving for the future. And crucially, try to maintain an emergency fund that covers 3-6 months of expenses – economic recovery is underway but not guaranteed; job security can’t be taken for granted in a tight economy, so a cushion is key.

Business Owners (SMEs)

Take advantage of the tax cuts – e.g., if you stopped accepting mobile money due to e-levy, you can wholeheartedly embrace digital payments again, which may improve your sales and record-keeping. Plan for possibly increased tax compliance enforcement: register your business if not done, keep basic books, and pay your quarterly taxes to avoid penalties. Prices of imported inputs might moderate slightly due to removal of some import levies and a stable cedi, so consider passing on some of that by pricing competitively – it could win you more customers as overall consumer spending power is still tight. Also, interest rates are high but expected to fall – maybe hold off on a big loan-financed expansion until late-year when cost of borrowing could ease. The budget also continued programs like the YouStart (albeit rebranded now) and DB Ghana funding for SMEs; see if you can tap those relatively cheaper credit lines for expansion.

Informal Traders and Households

The key message is to be thrifty and resourceful. Prices are still high, so shop smart: buy foodstuffs in bulk at farm gates or join co-ops to get better prices, substitute expensive imported products with local ones (e.g., use local rice which is often cheaper now than imported due to import substitution push). The government didn’t add new subsidies, so any relief will come from your own budgeting savvy. For transport, if trotro fares have stabilized, stick to public transport instead of more expensive options when possible. Also, consider group savings schemes (susu or credit unions) which often give better returns than keeping cash idle – with inflation, idle cash loses value daily. The budget’s aim to improve the economy will take time to translate to tangible relief, so in 2025, personal discipline is still paramount.

Cost of Living Adjustments

There was acknowledgement that 2024 was tough and 2025 may still be. The budget’s focus on fiscal discipline could mean fewer populist giveaways. Households should plan for school fees and rent increases without expecting new government subsidies. That said, the budget did remove the nuisance taxes that indirectly frees up some household money – for example, no e-levy means if you’re an informal worker receiving remittances via MoMo from relatives, you get a bit more of the money sent. Use that wisely, maybe to offset the jump in school textbook prices or uniforms due to past inflation.

Cedi Outlook – Impact on Personal Finance

The strength of the cedi influences imported goods prices (electronics, medications, even some food). The budget anticipates a slight dip in reserves (3.7 to 3 months import cover) but overall expects stability. If the cedi holds around current levels, you won’t see the kind of shocking price changes in phones or canned foods we saw when the currency plunged. It might even be worth keeping some savings in cedi fixed-income rather than scrambling for dollars. However, if you plan a big event like a wedding requiring imported items, consider hedging by buying those items sooner or locking an exchange rate with your forex dealer, just in case.

Conclusion

The 2025 budget is somewhat austere at the macro level, but it has delivered tax relief and signals of stability that translate into cautiously positive news for personal finances. The cost of living remains high but should not dramatically worsen; indeed the hope is gradual improvement – kind of like a fever breaking, we’re past the worst of the economic fever of 2022-23, but still need rest and care to fully recover. For the average Ghanaian, the mantra for 2025 is “cautious optimism.” Enjoy the small victories (like no e-levy and stable fuel for your generator during ‘dumsor’ nights), but continue to budget prudently. The finance minister, Dr. Ato Forson, acknowledged that stabilizing public finances “may not directly translate into improved conditions for households” immediately, which is a frank admission. So we must bridge that gap ourselves through sound personal finance practices. By staying informed (you’ve read this far, so you’re on track!), adjusting spending habits, and taking advantage of any breaks the budget gives, you can navigate 2025 with your finances intact and maybe even improved. Remember, “sika mpɛ dede” – money doesn’t like noise, or rather, in context, avoid panic and impulsive decisions. Keep calm, adjust your sails to the new policy winds, and you’ll find yourself on steadier waters as Ghana’s economy gradually finds its feet again.