Development economist at the University of Ghana, Hayford Mensah Ayerakwa, has expressed strong concerns about the sustainability of the government’s 2026 budget, arguing that the fiscal framework lacks the “novel and innovative” revenue measures required to support promised tax cuts and maintain macroeconomic stability.
Speaking on the Asaase Breakfast Show on Monday (17 November), Ayerakwa said the government’s approach relies heavily on compliance rather than developing new, reliable sources of revenue.
“Sustainability will depend on the novelty the minister introduces. Unfortunately, I’m not seeing that novelty,” he said. “We are cutting essential tax handles like the COVID-19 levy, yet I don’t see innovative ways of replacing that revenue.”
He highlighted property rates, road tolls, and modernised revenue systems as “low-hanging fruits” the government continues to underutilise.
Port duties fuel uncertainty, corruption
Dr. Ayerakwa also questioned the current system of dollar-denominated import duties, arguing that linking duties to fluctuating exchange rates creates unpredictability for businesses and invites under-declaration and corruption.
“You are not even sure how much duty you will pay at the time of importing a container. That is wrong,” he stressed.
He argued for fixed cedi-based valuation to enhance transparency.
Inflation gains fragile
Commenting on Ghana’s return to single-digit inflation, Dr. Ayerakwa said the improvement is largely due to favourable weather, good harvests, reduced transport fares, and exchange rate stability — rather than structural reforms.
“Our food inflation has gone down because the rains have been favourable. We have not introduced major irrigation infrastructure to guarantee all-year-round production,” he cautioned.
He added that sustainability of the gains depends on global prices, exchange rate stability and domestic agricultural investment.
Gold revenue concerns: “Where is the gold coming from?”
Dr. Ayerakwa raised serious environmental and ethical concerns about Ghana’s gold revenue stream, pointing to the government’s reported US$13.3 billion in gold sales as of September 2025.
“These gold buyers often buy from illegal miners. There is a direct relationship between the rise in illegal mining and the revenue we are making,” he said.
He questioned whether the financial gains justify the environmental destruction and loss of lives associated with illegal mining.
Businesses still burdened by electricity costs
On the question of relief for industry from VAT rationalisation, Dr. Ayerakwa said electricity cost remains the biggest threat to businesses, especially as utility companies are seeking tariff increments of over 200 percent.
“The VAT rationalisation puts money back in the pockets of consumers, not businesses,” he said. “If electricity tariffs rise next month, the business community will either have to absorb it or pass it on.”
He also criticised the quality of consultation leading to the budget, describing the last-minute engagement with market actors as “optics rather than genuine input gathering.”
Compliance challenges ahead
Dr. Ayerakwa warned the finance minister may struggle to achieve the targeted compliance levels unless taxpayer engagement improves.
“If businesses feel treated like criminals when they go to comply, they will find alternative ways. We must support them, not frustrate them,” he said.
He urged broader reforms that promote fairness and transparency, arguing that trust between businesses and the state remains essential to achieving meaningful revenue mobilisation.
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