Financial analyst urges diversification of Ghana's revenue sources

Financial analyst, Yaw Appiah Lartey has called for urgent action to address the growing concerns surrounding Ghana’s revenue generation, urging the government to focus on tackling revenue leakages and diversifying its income sources.

Speaking on Morning Starr with Lily Mohammed, Mr. Lartey emphasized that while the country’s Gross Domestic Product (GDP) is growing, the growth in tax revenue is not keeping pace. He pointed out that the nation is grappling with a significant gap between its economic growth and its tax revenue collection.

He advised that negotiations should be with the International Monetary Fund (IMF) and external creditors, suggesting that the government still has significant work to do. This reaction was following the vetting of the financial minister-designate.

However, the financial analyst warned that the nation faces a critical vulnerability in its taxation system. According to him, currently, 77% of government revenue is derived from taxes, a concentration that poses a serious risk to the economy if tax revenues were to decline for any reason.

“We are generating revenue; our GDP is growing but we are not having corresponding growth in our task revenue. We have to negotiate with the IMF and external creditors. We have to negotiate the entire IMF programme because significant portions of the external credit facility have been disbursed. We have to engage IMF and discuss the additional support that we require”.

“We have an economy that is over-taxed. You cannot run an economy that has this concentration risk. 77% of the revenue is from tasks so if tomorrow there are no taxes, we will struggle to sustain the economy. This is a huge risk, and we should diversify our revenue sources to mitigate it”.

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