The Institute for Fiscal Studies (IFS) has identified weak revenue generation from the extractive sector, revenue leakages and excessive tax exemptions as three major factors contributing to Ghana’s poor revenue mobilisation.
The IFS assessment comes ahead of the government’s 2027 Budget. Ghana’s total revenue and grants as a proportion of Gross Domestic Product (GDP) stood at 15.7% in 2025.
The IFS estimates that Ghana collected GHS 224.88 billion in revenue and grants in 2025, compared with GHS 288.26 billion, which would have represented the Sub-Saharan African average of 20.1% of GDP. The revenue shortfall is attributed to challenges including limited revenue generation from the extractive sector and leakages in the revenue collection system.
Ghana’s low revenue mobilisation has affected the country’s ability to deliver infrastructure, both in terms of quantity and quality, compared with other countries. The IFS warns that the government’s limited revenue mobilisation has significant implications for the country’s development and public expenditure.
The Institute’s assessment highlights the need to address weaknesses in revenue mobilisation as the government prepares its 2027 Budget.
According to the IFS, strengthening domestic revenue generation and reducing losses within the tax system are crucial to improving Ghana’s revenue mobilisation. The Institute’s Director, Professor Newman Kusi, was not available for comment. However, experts at the Ministry of Finance have acknowledged the need to address the revenue shortfall.
The implications of Ghana’s low revenue mobilisation are significant, with potential impacts on the country’s ability to finance development and public expenditure. The government will need to consider measures to strengthen revenue generation and reduce losses within the tax system as it prepares the 2027 Budget.
The IFS assessment will likely inform the government’s budget decisions, with a focus on improving revenue mobilisation and addressing the revenue shortfall.