Accra: The Institute of Fiscal Studies (IFS) says the government's revised total revenue and grants target of GHS229.95 billion by the end of the year is likely not to be achieved. The think tank highlighted that revising the target upward from GHS227.08 billion to GHS229.95 billion, equivalent to 16.4 percent of Gross Domestic Product (GDP), was untenable due to challenges that constrained Ghana's revenue mobilisation efforts in the first half of the year.
According to Ghana News Agency, Mr Leslie Dwight Mensah, a research fellow at IFS, explained during a press briefing on the assessment of the government's mid-year fiscal policy review, that despite signs of improved economic recovery and stabilisation, total revenue and grants underperformed by GHS3.24 billion in the first half of the year.
He noted that despite this underperformance, the government had neither revised downwards its revenue projections nor introduced rigorous policies to bolster revenue, except for the anticipated GHS2.87 billion expected from the introduction of the GHS1 petroleum levy. He emphasized the difficulty in achieving the revised revenue target, stating, "To achieve the revised revenue target, the government must close this gap and simultaneously meet its original revenue target for the second half of the year, which will be difficult to achieve."
The IFS pointed out that evidence over the past eight years had shown that attaining revenue and grants to reach 16 percent of GDP had been elusive. Mr Leslie indicated that the government's goal of mobilising 16.4 percent of GDP in 2025, using strategies not different from those deployed over the years, would not yield the desired results.
In light of this, the IFS has called for a reset of the country's revenue mobilisation strategy, suggesting a focus on the extractive sector. It noted that this could potentially earn the country about US$4 billion annually through a production-sharing agreement.
