Leveraging 2024 mid-year budget review for SMEs
In the face of global economic challenges, Ghana's 2024 Mid-Year Budget Review, presented by Dr. Mohammed Amin Adam, MP, Minister for Finance, underscores the government’s commitment to fostering economic stability and growth.
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Among the various sectors highlighted, Small and Medium-sized Enterprises (SMEs) and the workforce stand out as key beneficiaries.
This feature article delves into the potential impacts of the budget review on SMEs and workers, exploring how they can leverage the initiatives and policies for business and career transformation, improvements, and growth.
Impact on SMEs
Small and Medium-sized Enterprises (SMEs) are the backbone of Ghana’s economy, employing 80% of the workforce and contributing about 70% to the GDP. The 2024 Mid-Year Budget Review introduces several measures and initiatives aimed at bolstering the SME sector.
1. SME Growth and Opportunity Programme (SME GO).
The SME Growth and Opportunity Programme is a cornerstone of the government’s strategy to support SMEs. This programme connects SMEs with essential resources, expertise, and opportunities.
1.1 Financial Support: The government has mobilised about GH¢8.2 billion through the Development Bank Ghana (DBG), Ghana Exim Bank, Ghana Enterprises Agency (GEA), and other partners. This funding is crucial for SMEs to access credit and expand their operations.
1.2 Technical Assistance: In addition to financial support, the programme provides technical assistance to help SMEs improve their business practices, enhance productivity, and become more competitive in regional markets.
2. Tax incentives and compliance
The budget review outlines several tax incentives and compliance measures designed to ease the financial burden on SMEs and encourage formalisation.
2.1 Simplified Taxation Scheme: The introduction of a simplified digital solution for the operationalisation of the modified taxation scheme aims to broaden the tax base and improve compliance. This system will make it easier for SMEs to manage their tax obligations, thereby reducing administrative burdens.
2.2 Electronic Invoicing System (e-VAT): The expansion of the electronic invoicing system to onboard 2,000 more taxpayers by the end of the year will streamline VAT collection and improve transparency in business transactions.
3. Access to Technology and Digital Infrastructure
Digital transformation is a key focus of the 2024 budget, with significant investments in expanding digital infrastructure and services.
3.1 Ghana.Gov Payment Platform: The deployment of the Ghana.Gov Payment Platform to over 1,500 public institutions will facilitate easier and more transparent financial transactions for SMEs.
3.2 Digital Skills Development: The government’s investment in digital skills development, including the construction of a Digital Youth Skills Hub at the University of Ghana, aims to equip young entrepreneurs with the skills needed to thrive in a digital economy.
Impact on workers
The 2024 Mid-Year Budget Review also places significant emphasis on enhancing the livelihoods and career prospects of Ghana’s workforce through various social and economic initiatives.
1. Job Creation and Skills Development
Youth Employment Agency (YEA): The YEA has engaged about 90,000 beneficiaries in various programmes, including community policing, health services, and garment and apparel production. These initiatives provide young people with valuable work experience and skills.
1.1 Technical and Vocational Education and Training (TVET): The government’s investment in TVET aims to empower young people with employable skills. With 168,000 students enrolled in the 2023-2024 academic year, this initiative is crucial for addressing the skills gap in the labor market.
2. Social Protection and Livelihood Support
Livelihood Empowerment Against Poverty (LEAP): The LEAP programme provides financial support to vulnerable households. With increased grants and expanded beneficiary coverage, more households can improve their living conditions and access basic necessities.
2.1 National Health Insurance Scheme (NHIS): Enhanced funding and expanded benefits under the NHIS ensure that more workers and their families have access to essential healthcare services, reducing out-of-pocket expenses and improving overall well-being.
Leveraging the budget for business and career growth For SMEs
Access Funding Opportunities: SMEs should explore the financial support available through the SME GO programme and other government-backed financial institutions. Applying for these funds can help businesses expand, innovate, and become more competitive.
1. Embrace Digital Solutions: Leveraging digital tools such as the Ghana.Gov Payment Platform and the e-VAT system can streamline operations, improve transparency, and enhance customer satisfaction. SMEs should also invest in digital skills training for their staff to stay competitive.
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2. Enhance Compliance: Taking advantage of the simplified taxation scheme and ensuring compliance with tax regulations can reduce administrative burdens and avoid penalties. This will also position SMEs better for future growth and investment opportunities.
For workers
Participate in Skills Development Programmes: Workers should actively engage in the various skills development and training programmes offered by the government, such as those through the YEA and TVET institutions. Acquiring new skills and certifications can enhance employability and career prospects.
1. Utilise Social Protection Schemes: Benefiting from programmes like LEAP and NHIS can provide financial stability and access to healthcare, allowing workers to focus on their careers without worrying about necessities.
2. Explore Employment Opportunities: The government’s various job creation initiatives, including those in community services and health sectors, offer valuable work experience and pathways to stable employment. Workers should stay informed about these opportunities and participate actively.
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Conclusion
Ghana's 2024 Mid-Year Budget Review offers a comprehensive framework for supporting SMEs and the workforce. By providing financial support, enhancing digital infrastructure, and promoting skills development, the government aims to create an enabling environment for business growth and career advancement. SMEs and workers can leverage these initiatives to transform their businesses and careers, contributing to a resilient and prosperous Ghanaian economy.
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System Summary
Leveraging 2024 mid-year budget review for SMEs
The article explores how SMEs in Ghana can benefit from the 2024 mid-year budget review. It outlines the budget's provisions for supporting SMEs, including tax incentives and funding opportunities, and discusses how businesses can leverage these measures for growth.
The piece also addresses potential challenges and offers recommendations for maximizing the benefits of the budget review, highlighting the broader economic impact of a thriving SME sector.
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