Leslie Mensah, a senior research fellow, recently made a passionate call for a fundamental reset in Ghana’s approach to revenue mobilisation, especially within the extractive sector.
According to Mr. Mensah, the country’s persistent struggle with inadequate revenue is undermining its ability to deliver on crucial development programmes.
During a detailed analysis, Mr. Mensah recommended that Ghana should abandon the current concession regime that governs natural resource extraction and instead adopt Production Sharing Agreements (PSAs). He argued that PSAs have consistently delivered higher revenues and greater foreign exchange inflows for other resource-rich nations, offering a more sustainable foundation for economic growth. “Production sharing agreements have been shown to result in more substantial revenue generation and greater foreign exchange inflows, which can strengthen the economy on a more sustainable basis,” he noted.
Mr. Mensah further emphasised the importance of active state participation in the extractive industry. He believes that this approach would enable Ghana to exercise greater control over its natural resources, reducing reliance on external institutions for managing and marketing the country’s mineral assets.
Turning his attention to the government’s Gold for Development programme, Mr. Mensah was critical, arguing that it falls short of addressing Ghana’s core fiscal revenue challenges. He pointed out that the programme treats gold merely as a business commodity without guaranteeing majority state ownership or the necessary revenue capture for the nation.
In his analysis, Mr. Mensah outlined three key recommendations for the government:
- Switch to Production Sharing Agreements: Move away from concession regimes in the extractive sector and adopt PSAs to enhance state revenues and foreign exchange inflows.
- Avoid Hasty Return to International Bond Markets: Refrain from rushing back to international borrowing as a short-term solution, as this could worsen debt vulnerabilities and risk another crisis.
- Ensure Transparent Fiscal Reporting: Fully disclose and account for fiscal support to the financial sector within national accounts, providing a clear and comprehensive picture of Ghana’s fiscal position.
Mr. Mensah concluded that implementing these measures would not only bolster Ghana’s revenue base but also set the economy on a more sustainable path to growth.
Source: Apexnewsgh.com
