Ghana’s revenue reforms failing structural test – Prof Godfred Bokpin

Professor Godfred Alufar Bokpin, an economist from the University of Ghana Business School, has expressed dissatisfaction with Ghana's International Monetary Fund (IMF)-backed revenue reforms. In an interview with the Ghana News Agency, Bokpin suggested that these reforms have not delivered the anticipated structural improvements in domestic revenue collection.

He recommended further enhancements in tax administration, elimination of loopholes, and broader reach into the informal sector, while also reducing dependency on volatile commodity revenues.

Ghana established the National Revenue Policy (GNRP) in 2023, guided by the Medium-Term Revenue Strategy (MTRS), with the aim of increasing the tax-to-GDP ratio, which has remained stagnant at around 12-14 percent since 2015. Despite the IMF-supported $3 billion loan program, the country's tax-to-GDP ratio has remained around 14 percent during the implementation period.

The first-quarter results from the Ministry of Finance disclosed that Ghana had mobilized only GHS57.53 billion, slightly below the targeted GHS268.1 billion.

Bokpin's concerns revolve around reforms not successfully strengthening the revenue base despite years of policy changes guided by IMF recommendations. He emphasized that Ghana still has gold-backed foreign exchange reserves at the central bank, indicating an underutilized potential. Moreover, he pointed out that regime changes, which often lead to businesses being classified as inactive until the new party takes power, affect both businesses and tax revenue.

Bokpin stressed the need to move away from this political business cycle and instead focus on building a stable, growing indigenous business base from micro to large enterprises, which would contribute to a more sustainable tax net.