Professor Isaac Boadi, Dean-Faculty of Accounting and Finance, University of Professional Studies-Accra, has laid bare the scale and sources of fiscal losses the state endures due to tax-related inefficiencies, illegal trade practices and natural resource mismanagement.
According to his analysis, Ghana loses approximately US$9.02billion annually; with the largest drains coming from tax-related inefficiencies, illegal trade practices and natural resource mismanagement.
“Ghana is not ‘broke’ – we are bleeding. But our real battle is not about political parties. It’s Ghana versus corruption. And until we win that battle, our fiscal stability will remain fragile.”
The aforementioned amount is equivalent to six times the annual cost of government’s flagship Free Senior High School programme and nearly five times the National Health Insurance Scheme’s budget allocation.
The Ghana Revenue Authority (GRA) alone is estimated to lose around US$3billion every year – representing 30 percent of its potential collections – due to illicit financial flows, with high-net-worth individuals and foreign firms exploiting legal loopholes.
Meanwhile, Customs-related corruption including under-invoicing and port malpractices account for an additional US$515million based on a 2023 World Bank report.
The mining sector also accounts for substantial losses. In 2022, Ghana lost US$2billion in taxes and royalties from the gold industry, with the Minerals Commission estimating that 60 percent of small-scale mining operations evade taxes.
The oil and gas sector contributed a further US$1.5billion of unaccounted-for revenues in 2023 due to opaque production-sharing arrangements.
Also, illegal logging deprives the state of US$250million each year. The informal economy, which employs roughly 80 percent of the country’s workforce, is another area of concern – contributing to estimated losses of US$15.6million annually due to weak tax compliance.
Meanwhile, the Ports and Harbours Authority reportedly loses US$250million annually through undervalued imports and collusion at entry points while the public procurement process bleeds US$170million yearly through inflated contracts and unaccounted expenditures.
Prof. Boadi identified four root causes fuelling the problem: weak enforcement, outdated systems, entrenched institutional corruption and a lack of transparency.
To reverse the trend, he called for a multi-pronged solution anchored on digitalisation, strict sanctions, transparency and formalising the informal economy.
