How the 2026 budget will affect key sectors: Insights for Investors and SMEs

The 2026 Budget focuses on resetting for growth, jobs and economic transformation. This article explores the sector-by-sector initiatives by highlighting key areas of focus with opportunities for investors and SMEs.

Manufacturing

Manufacturing expanded by 6.3%, compared to a contraction of 0.5% in 2024, reflecting improved energy reliability and domestic demand. Policy initiatives to drive growth in the sector include:

Feed the Industry Programme: The government will introduce incentives to promote local production and import substitution to strengthen domestic value chains. Key policy actions include:

• Restricting the exportation of non-ferrous scrap metals. This is expected to enhance the value-chain for component manufacturing of automotive and machine parts. Non-ferrous scrap metals are critical raw materials for Ghana’s recycling and manufacturing sectors, supporting industries such as construction, electronics, automotive, wire and cable production, batteries, tools, and jewelry.
• Restricting the export of raw rubber as part of efforts to secure sustainable supply of raw materials for domestic processing and the development of the local value chains. The total rubber processing capacity in-country is estimated at 178,420 tons per annum, which far exceeds the total annual production of approximately 100,000 tons. This highlights strong potential for downstream industrial expansion.
• Industrialisation under the 24-Hour Economy and Accelerated Export Development Programme (24H ). Strategic investments such as the Volo–Battor Agro-Industrial Park, Volta Lake Multimodal Transport System, Tamale Air Cargo and Export Hub, and Yapei Inland Port are expected to accelerate growth.
• Manufacturing sector growth will be supported by reliable energy supply. In the budget, government has allocated GH¢15.2 billion to cover energy sector shortfall payments and GH¢4.8 billion to settle legacy debts owed Independent Power Producer (IPP).

Opportunities: With declining inflation (3.8%), policy rate (15.5%) and other incentives, the environment for manufacturing is improving. Businesses can leverage opportunities across integrated value chains covering production, processing, logistics and market access.

Agriculture Sector Initiatives

Agriculture delivered a robust performance, growing by 6.0 % in the first half of 2025, compared to 2.9 % in 2024. Growth was broad-based, with crops expanding by 6.2 %, livestock by 5.8 %, and fishing by 7.7 %. Investors can explore agro-processing, mechanisation services and export-oriented production. The initiatives to drive growth in the sector include:

Farmer Service Centers Initiative

• Government will deploy over 4,000 agricultural machinery units across 50 agricultural districts, supported by a GH¢690 million budget allocation. The initiative will support machinery operation, maintenance and logistics services.
• Expanding feeder roads and market access through World Bank Funded 1,000 kilometers Agricultural Enclave Roads Programme.

The Red Gold Production Reform (Oil Palm)

Ghana imports nearly 200,000 metric tonnes of crude palm oil annually, draining over $200 million in foreign exchange.

1. Market Dynamics

• Production peaks between February-May and a lean season in September-December. This corresponds to the rainy and dry seasons. About 70 % of annual yield occurs in peak season.
• The sector serves both household consumption and industrial manufacturing.
• Large and medium plantations and mills including Ghana Oil Palm Development Company, Twifo Oil Palm Plantations Ltd, Benso Oil Palm Plantations, Norpalm Ghana, Juaben Oil Mills, Ayiem Oil Mills, Golden Star and Volta Red dominate industrial production.
• The industry has not expanded due to the lack of diversification into value added products, which constitute one of the main success factors in exporting countries like Indonesia and Malaysia.
• Sector growth has also been constrained by weak protective measures against imports, land tenure challenges, access to finance and infrastructure gaps.
• The PSI oil palm programme (launched in 2003) aimed to cultivate 300,000 hectares within 15 years but achieved only 30,000 hectares by 2008.

1. Reform Strategy

Government will establish a $500 million Oil Palm Development Finance Window in partnership with the World Bank, Development Finance Institutions (DFIs) and the Development Bank Ghana (DBG). Financing will cover up to 70 percent of project costs, with investors and cooperatives contributing the remainder. Funding will be conditional on sustainability and governance standards, environmental protection, decent employment and labour standards. Initial support will focus on nurseries, out-grower schemes, land-bank activation, long-term crop financing, smallholder inclusion and value addition through local processing.

–New Outgrower Partnership Scheme

• Smallholder farmers will be linked directly to nucleus estates and processing facilities with access to improved seedlings, mechanization services, subsidized fertilizer and guaranteed off-take agreements at fair prices.
• A Smallholder Support Fund will support women and youth with affordable credit and skills training.
• Government, through the Tree Crops Development Authority (TCDA), Oil Palm Research Institute (OPRI), and Ghana EXIM Bank, will provide financing, research and technical assistance to organised cooperatives.

-Regulatory Oversight

• The Tree Crops Development Authority (TCDA) will serve as the lead regulator to coordinate licensing, production planning and data management.
• The Oil Palm Research Institute (OPRI) will focus on developing high-yield, climate-resilient varieties
• The Oil Palm Development Association of Ghana (OPDAG) will promote industry coordination and public-private dialogue.
• Government will introduce a tax stamp regime for refined edible oils to eliminate smuggling and under-declaration, ensure fair taxation and protect domestic producers.

-Palm Oil Industry Outlook

Ghanaian palm oil consumption is projected to reach nearly 64,000 metric tonnes by the end of 2026, growing 0.3% year on year. Since 2017, demand has increased 1.1% annually. Production is set to reach 432,000 metric tonnes by the end of 2026, increasing by 3.3% year-on-year.

Forecast (Palm Oil Supply): The forecast data for 2024 to 2028 shows a consistent year-on-year increase (in Thousand Metric Tonnes):

• 2024: 551.0
• 2025: 559.0
• 2026: 566.0
• 2027: 573.0
• 2028: 580.0

The Compound Annual Growth Rate (CAGR) from 2023 to 2028 is approximately 1.32%, indicating a steady but slight increase in supply over the five-year period.

Forecast: Palm Oil Domestic Consumption

Domestic consumption was projected to rise from 418,000 metric tonnes in 2024 to 435 000 metric tonnes by 2028. The consumption was at 412,000 metric tonnes in 2023, indicating an upward trend. The year-on-year variation shows a stable growth rate around 1.4% from 2024 and onward. The compound annual growth rate (CAGR) over the last five years stands at approximately 1.1%, reflecting steady market demand.

Prospects: Growing demand for palm oil in food, personal care products and biodiesel production presents strong opportunities. Biodiesel, for instance, has a high demand in the automotive industry as it emits less GHG (Greenhouse Gas which contributes to global warming and climate change). The global biodiesel market is projected to grow from $32.09 billion in 2021 to $73.05 billion by 2030, driven by demand for low-emission fuel alternatives (renewable and biodegradable).

1. C) Services Sector Performance

• The services sector remained the primary engine of economic growth, expanding by 8.8% in the first half of 2025, compared to 3.2% over the same period in 2024. This strong rebound reflects renewed vitality in Ghana’s services economy, particularly within technology, finance, and education.
• The financial and insurance sector recorded growth of 9.5 %, supported by improved capitalization, accelerated digital transformation, and stable market conditions. Similarly, the transport and storage sub-sector expanded by 6.7 %, driven by increased trade activity.

Policy initiatives to improve capacity and efficiency to drive growth include:  

• The Births and Deaths Registry will intensify registration drives with mobile registration campaigns and deployment of digital systems.
• Revise the National Land Policy and the Lands Commission Act, and finalise the Legislative Instrument for the Land Act, to enable the establishment of a National Digital Land Registry. This integrated system will link land, planning, and property data, enhance transparency, reduce land-related litigation and position land as a reliable asset for business development and lending.
• Under the Rural Telephony and Digital Inclusion Project, an additional 2,016 cell sites will be connected to extend telecommunications coverage to approximately 4.5 million additional people nationwide.
• The Registrar-General’s Department will develop and deploy new digital software systems to support the registration of Intellectual Property, Marriages and Estates.

1. D) Digitalisation Initiatives: With a focus on infrastructure, digital tax systems and e-commerce growth, the initiatives include:
   • New agreement with China on Artificial Intelligence cooperation with a grant of $30 million for digital infrastructure.

• Artificial Intelligence (AI)-driven pre-arrival inspections for all cross-border shipments. This technology will detect under-valuation, flag high-risk goods, and strengthen Customs’ capacity to combat smuggling, improve safety and protect national security.
• National Strategy for the Development of Statistics (NSDS3) for 2026–2030. A blueprint for a modern national statistical system to track national priorities and the SDGs. The strategy will scale the use of modern technology including artificial intelligence.
• Deploying electronic and digital solutions (Fiscal Electronic Devices) to improve VAT administration.
• GH¢100 million for the National Coders Programme, Regional Digital Centres, and a FinTech Growth Fund to accelerate digital skills and SME competitiveness. GH¢160 million for ‘Adwumawura’ enterprise support.

Opportunities: Tech startups, innovation hubs and digital SMEs stand to benefit significantly and position Ghana as a regional technology and innovation hub.

Conclusion

The 2026 Budget has indeed provided incentives to spur growth, create jobs and transform the economy. The outcomes of these priorities will depend on effective implementation and active private-sector participation. It is imperative for investors and SMEs to identify areas of strength and build partnerships across value chains to enable them make gains from the government’s initiatives.

Further Reading:

1. The Budget Statement and Economic Policy of the Government of Ghana for the 2026 Financial Year: Resetting for Growth, Jobs, and Economic Transformation (Manufacturing pg: 12, 69 &130; Farmer Service Centres pg: 123,141 & 145; Red Gold pg: 120-122 &141; Services Sector pg 11, 61, 68, 76 & 85; Digital Initiatives pg: 90, 94,105-107& 143)
2. Ampofi et al (2025): Trend Analysis and Forecast of Ghana’s Palm Oil Exports and Imports. Asian Journal of Economics, Business and Accounting 25 (6):248-61. https://doi.org/10.9734/ajeba/2025/v25i61850
3. https://www.reportlinker.com/clp/country/15670/726343

4.https://www.grandviewresearch.com/industry-analysis/biodiesel-market

 

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