Government is being urged to prioritise maximising revenue from its natural resources as a key strategy to address the country’s ongoing economic challenges.
The recommendation comes amid concerns over missed revenue targets and economic fragility.
A Senior Research Fellow at the Institute for Fiscal Studies (IFS), Dr. Said Boakye, in a recent policy brief highlighted the economy’s critical need to derive greater benefits from its natural resource wealth – particularly in the face of persistent revenue mobilisation challenges.
Despite the country’s rich endowment in resources like gold and oil, it has yet to fully capitalise on these assets for revenue generation.
“Maximising revenue generation from natural resources should be central in the country’s quest and strategy to significantly increase government revenue mobilisation.”
The IFS report comes following the 2024 Mid-Year Fiscal Policy Review presented to parliament by Finance Minister Dr. Amin Adam. The review revealed that total revenue and grants fell below target by GH¢1.4billion, underscoring the urgent need for more effective revenue generation strategies.
Meanwhile, total revenue and grants outturn fell below its target of between GH¢76.1billion and GH¢74.7billion, with domestic revenue and foreign grants underperforming their targets by GH¢221million and GH¢1.2billion respectively.
“Government should increase its ownership interests in the natural resource sector or adopt superior contractual arrangements like production-sharing agreements,” he advised.
These measures, according to Dr. Boakye, have proven successful in other countries; helping them capture a larger share of earnings from their natural resource sectors.
In the broader economic context, the policy brief also observed that the revised 2024 total revenue and grants target of 17.4 percent of GDP “appears out of sync with reality and is thus not achievable”.
This assessment underscores the importance of exploring alternative revenue sources, with natural resources presenting a significant opportunity.
Dr. Boakye reiterated that maximising natural resource revenue is not just about immediate financial gain, but also about long-term economic stability.
IFS recommendations extend beyond natural resources, calling for a comprehensive review of tax exemptions and cautioning against the politicisation of economic policy decisions – especially as the country approaches its 2024 elections.
Government must recognise that our natural resources are a national treasure that, if properly harnessed, can significantly contribute to our economic recovery and growth.
