Deloitte’s Warning on Ghana’s Revenue Risks: Beyond Increasing Taxes
Deloitte Ghana’s cautionary assessment of the 2025 Mid-Year Budget Review rightly highlights some serious revenue risks for the government, particularly from underperformance in grants, petroleum receipts, and import duties. While it is encouraging that certain tax segments such as Non-Oil Tax, Corporate Income Tax, and Mineral Royalties have shown growth, relying heavily on increasing revenue targets year after year especially through traditional tax channels is neither innovative nor sustainable. The current reset agenda by John Mahama calls for institutions like Deloitte and the government itself to move beyond textbook assessments and embrace innovative, entrepreneurial approaches to public finance.
Ghana, like many emerging economies, undoubtedly grapples with structural issues like exchange rate volatility, dependence on commodity exports, and weaknesses in tax administration. These challenges complicate efforts to meet fiscal targets and maintain macroeconomic stability. However, repeatedly increasing revenue targets or imposing heavier tax burdens on citizens and businesses is an outdated and unsustainable response. Such approaches risk stifling growth, discouraging investment, and deepening economic inequalities, ultimately undermining the very fiscal goals they seek to achieve. This situation underscores the urgent need for a paradigm shift towards what can be described as entrepreneurial finance in public sector management. Entrepreneurial finance involves adopting innovative, flexible, and growth-oriented fiscal strategies that leverage new technologies, diversify revenue sources, and improve efficiency in public revenue mobilization and expenditure management.
For example, Ghana’s government and advisory institutions should prioritize digital transformation in tax collection, utilizing data analytics and automation to broaden the tax base and enhance compliance without increasing rates. Tapping into the expanding digital economy and formalizing taxation of online businesses and e-commerce platforms could generate significant new revenue streams with minimal public backlash. Furthermore, improving governance and profitability of state-owned enterprises can unlock dividend streams that ease fiscal pressures as well as expanding non-tax revenues through environmental levies, tourism fees, or innovative licensing and empowering decentralized fiscal authorities can also contribute to a more resilient and diversified fiscal landscape. To help further bridge this fiscal gap, alternative revenue mobilization strategies should be recommended to the government with the private sector and institutions like the State Interest and Governance Authority (SIGA) playing pivotal roles. The private sector is widely recognized as the engine of economic growth and development. Its role in alternative revenue mobilization is multifaceted.
Firstly, through investment and business expansion, the private sector stimulates economic activities that broaden the tax base. As businesses grow, they create jobs and increase income generation, leading to higher income taxes, corporate taxes, and consumption taxes. Secondly, the private sector drives innovation in revenue generation by developing new products, services, and technologies. For example, the growth of digital financial services and e-commerce platforms opens up new avenues for revenue that were previously untapped. Thirdly, public-private partnerships (PPPs) provide a mechanism for the private sector to collaborate with government in financing and managing public infrastructure projects. These partnerships often generate alternative revenues through tolls, user fees, or service charges, thereby reducing fiscal pressure on government resources.
Moreover, a well-regulated and vibrant private sector enhances tax compliance and transparency, which directly improves government revenue collection without necessitating higher tax rates. The private sector also engages in corporate social responsibility (CSR), contributing resources to community development and public infrastructure. This contribution indirectly supports alternative revenue mobilization by alleviating government spending burdens. Lastly, by mobilizing domestic savings and strengthening capital markets, the private sector creates pools of investment capital that fuel further economic expansion and broaden the revenue base.
On the other hand, the State Interest and Governance Authority (SIGA) holds a strategic position in alternative revenue mobilization through its stewardship of state-owned enterprises (SOEs). SIGA’s mandate to optimize the performance of SOEs is critical, as the profitability and efficiency of these entities directly affect government revenue. By improving governance and financial management within SOEs, SIGA ensures that these enterprises generate consistent dividends and financial returns for the state. Furthermore, SIGA plays a vital role in commercializing and monetizing state assets, which may involve partial privatization or strategic partnerships. Such initiatives unlock capital that can be used to finance government priorities and generate sustainable revenue streams. SIGA also strengthens financial oversight, curbing inefficiencies and losses that often plague SOEs, thus safeguarding public resources. Through encouraging SOEs to diversify their operations and explore new markets, SIGA supports the development of additional revenue channels for the government. Finally, by facilitating strategic partnerships between SOEs and private firms, SIGA leverages private sector expertise and investment, enhancing the revenue-generating capacity of state assets.
In conclusion, alternative revenue mobilization is indispensable for developing economies like Ghana, and the complementary roles of the private sector and SIGA are central to this endeavor. The private sector fuels economic growth, innovation, and investment, thereby expanding the tax base and generating new sources of revenue. Meanwhile, SIGA’s effective governance and strategic management of SOEs unlock the potential of state assets to provide sustainable financial returns. Together, these actors contribute significantly to diversifying Ghana’s revenue streams, supporting economic development, and fostering fiscal sustainability.
Dr. Bernard Tetteh-Dumanya is a distinguished Ghanaian financial economist and consultant with nearly three decades of experience spanning academia, corporate finance, and agribusiness. He has held pivotal roles at institutions such as UBA Ghana, SIC Financial Services, Empretec Ghana, and the Swiss International Finance Group, reflecting his profound understanding of global finance. Renowned for pioneering efforts in risk management, compliance, and corporate strategy, Dr. Tetteh-Dumanya has significantly contributed to Ghana’s financial landscape. His expertise encompasses venture capital, business and financial reengineering, and fundraising, playing a crucial role in the growth and development of numerous entities. Driven by a commitment to capacity development, he has provided consultancy services to a diverse array of local and multinational organizations, including GIZ, AGRA, SNV, DANIDA, and USAID. As the CEO of SGL Royal Kapita, he has introduced innovative investment services targeting Ghana’s agriculture sector, aiming to support farmers and agribusinesses in achieving financial stability and growth. Beyond his professional endeavors, Dr. Tetteh-Dumanya is an influential columnist, offering incisive analyses on Ghana’s economic policies and advocating for strategic financial mechanisms to enhance the nation’s economic sovereignty.
For inquiries, Dr. Tetteh-Dumanya can be reached at: mafioba@yahoo.com
