‘Why cut what you just raised?’ — Sophia Akuffo questions government levy decision
The Institute of Economic Affairs (IEA) has cautioned that the reduction of the Growth and Sustainability Levy could weaken Ghana’s efforts to maximise value from its natural resources.
At a press briefing in Accra, the policy think tank said the government’s decision to cut the levy from three per cent to one per cent—intended to cushion investors—runs counter to a growing global shift towards resource ownership and enhanced national benefits.
The Growth and Sustainability Levy was previously increased from one per cent to three per cent as part of efforts to boost revenue from the extractive sector and ensure the country benefits more from rising global commodity prices.
A Distinguished Fellow of the IEA, Sophia Akuffo, questioned the rationale behind the latest policy move.
Why did government increase royalties, ostensibly to capture greater value from Ghana’s mineral wealth, only to simultaneously dilute that gain through tax concessions?” she asked.
Justice Akuffo said the reduction undermines the broader objective of ensuring that Ghana derives maximum benefit from its extractive sector, and called for coherent and predictable fiscal policies aligned with long-term national interests.
She expressed concern that despite Ghana’s vast natural resource endowment, the country has repeatedly turned to the International Monetary Fund for financial support.
Justice Akuffo further described as worrying the recent announcement by the Minister of Finance on plans to borrow GH¢17 billion to pay salaries, urging the state to leverage its mineral wealth to drive national development.
She pointed to countries such as Botswana, Burkina Faso, Chile and Venezuela as examples of nations adopting models centred on resource ownership and value retention.
“These developments have shown that asserting sovereignty does not repel investment; rather, it redefines the terms of engagement in favour of national development. They also show that Africans have woken up, and Ghana must join the awakening,” she said.
Justice Akuffo stressed that the expiration of more than 30 mining leases, record-high global mineral prices and the discovery of new critical minerals present Ghana with a rare opportunity to reset its resource governance framework.
She said this should involve engaging both local and foreign private sector expertise through service contracts that preserve national control while maximising economic benefits for industrial transformation.
The IEA therefore urged the government to adopt consistent fiscal policies that strike a balance between maintaining investor confidence and safeguarding national development priorities, to ensure that Ghana’s natural resource wealth translates into sustainable economic growth.
