Accra: The United Nations Development Programme (UNDP) has outlined some key strategies for Ghana to boost domestic revenue mobilisation to address development financing gaps. The UNDP said meeting the Sustainable Development Goals (SDGs) by 2030 would require aggressive domestic revenue mobilisation by blocking leakages in the taxation system, investing in value-addition, and cutting borrowing rates.
According to Ghana News Agency, Mr. Niloy Banerjee, Resident Representative, UNDP Ghana, speaking at the SDGs Financing for Development Dialogue convened by the UNDP in Accra, noted that Ghana's financing landscape remained a challenge amidst ongoing economic difficulties. Highlighting the significant SDG financing gap, Mr. Banerjee stressed the necessity for Ghana to 'reshape new action and narrative' to meet its development priorities. The Dialogue, themed 'Advancing Ghana's Financial Sustainability with Integrated National Financing Frameworks (INFF)', aimed at fortifying Ghana's financial architecture to achieve the SDGs.
Mr. Banerjee raised concerns about Ghana's revenue structure, which is in Cedis, while debt repayments are made in United States dollars, describing this practice as 'unacceptable.' Addressing revenue leakages, he pointed out tax avoidance as a significant issue, especially with many individuals in the informal sector not being captured in the tax net. 'We need to invest in value-addition. Otherwise, we are running on a treadmill and not moving forward,' Mr. Banerjee added.
Estimates by the National Development Planning Commission indicate that Ghana faces an annual SDG financing gap of $43 million, with the COVID-19 pandemic disrupting the implementation process. Mr. Thomas Ampem Nyarko, the Deputy Minister of Finance, acknowledged that tax leakages in the system were a major revenue challenge, noting that the country only collected 39 percent of its tax potential. He said the Ministry of Finance was collaborating with the Ghana Revenue Authority to seal tax leakages and expand the tax net, aiming to increase domestic revenue to finance development-related programs.
Mr. Nyarko expressed optimism about Fitch upgrading Ghana's credit rating to 'B-', emphasizing that this development signaled the economy's recovery. 'All hope is not lost. We are getting back on track to put the economy on the path of development,' he stated. Acknowledging the economic vulnerabilities that have tested Ghana's resilience, the Minister added, 'we are fully aware that the pace of work must accelerate to achieve the SDGs.'
The UNDP's Development Finance Assessment (DFA) is a tool designed to help governments enhance their policies and measures for mobilising various forms of finance. The tool aims to improve the coordination between sustainable development plans and funding strategies, thereby increasing the effectiveness of financing sources. It also manages both financial and non-financial risks and facilitates technical and financial collaborations.
