Ghana’s Revenue Mobilization Efforts Hindered by Structural Challenges – Dalex Finance CEO
Joe Jackson, Chief Executive Officer of Dalex Finance, has raised concerns about Ghana’s ability to improve revenue collection as a percentage of GDP, describing the country’s track record as weak.
Speaking during the NorvanReports and Economic Governance Platform (EGP) X Space Discussion on the topic, “Resetting the Economy: Can Ghana’s 2025 Budget Achieve Fiscal Stability and Sustainable Growth”, Mr Jackson highlighted the structural inefficiencies within Ghana’s tax regime that hinder revenue growth.
“Now, first of all, listen, our record in terms of increasing revenue as a percentage of GDP is not very good,” he said. “Normally, revenues go up from year to year, but as a percentage of GDP, they don’t rise to the targeted levels.”
According to him, the country’s tax system operates in silos, creating loopholes that enable tax evasion.
“Our tax regime is still in silos such that there seems to be no link between what happens at the port, what happens in your local tax office, and what happens elsewhere with VAT. So, it becomes easy not just to avoid but even to evade taxes,” he explained.
Mr Jackson also pointed to the need for broader tax compliance, particularly among the informal sector, noting that digitalization and enhanced identification systems could improve collection efforts.
“There’s a lot of talk about using the improved identification system to make sure that those in the informal sector pay their taxes,” he said. “But at the end of the day, it all depends on who sits at the Ghana Revenue Authority (GRA) and how well they execute this huge mandate.”
He cautioned that missing revenue targets could lead to further fiscal tightening.
“If we miss those revenue targets, then we’ll have to tighten our belts even more to meet them. It’s really challenging,” he added.
Fiscal Reforms and Debt Management
On Ghana’s debt sustainability efforts, Mr Jackson commended the government’s push to lower the cost of borrowing, noting that interest rate reductions have been aggressive.
“To the extent that the drop in rates has been dramatic and fierce, even against a threatened backlash, I say that the Minister of Finance and his team are demonstrating that they are determined to bring down the cost of servicing our debt to manageable levels,” he stated.
He further suggested that the government could cautiously re-enter the bond market, given that domestic coupon payments have been met on schedule.
“I truly believe that there is a window for the government to re-enter cautiously the bond market, especially since all the domestic coupons that have been due to date have been paid,” Mr Jackson remarked.
