The Institute for Fiscal Studies (IFS) has cast doubt on government’s ability to meet its revised total revenue and grants target of GH¢229.95 billion for 2025, warning that the projection may be overly ambitious given persistent revenue mobilization challenges.
The government raised its initial target from GH¢227.08 billion to GH¢229.95 billion equivalent to 16.4% of GDP despite a shortfall in collections during the first half of the year.
Presenting IFS’s assessment of the mid-year fiscal policy review, Research Fellow Leslie Dwight Mensah said the upward revision lacked strong justification.
“In spite of economic performance showing improved signs of recovery and stabilization, total revenue and grants under-performed in the first half of the year by GH¢3.24 billion,” he explained.
Mr. Mensah noted that government had not revised downwards its expectations nor introduced new, aggressive revenue measures beyond the GH¢1 petroleum levy, projected to yield about GH¢2.87 billion.
“To achieve the revised revenue target, the government must close this gap and simultaneously meet its original revenue target for the second half of the year, which will be difficult to achieve,” he cautioned.
IFS also pointed to historical evidence showing that Ghana has struggled to push revenue and grants above 16% of GDP for nearly a decade. Against this backdrop, the think tank argued that the government’s optimism of achieving 16.4% in 2025 was not supported by any fundamentally new policy direction.
“The government’s goal of mobilizing 16.4 per cent of GDP in 2025 with strategies not different from those deployed over the past years would not yield the needed results,” Mr. Mensah stressed.
Instead, the IFS urged policymakers to reset their approach, particularly by focusing on the extractive sector. According to the institute, adopting production sharing agreements could help Ghana capture greater value from its mineral and oil wealth, potentially generating up to US$4 billion annually.
Policy analysts say the IFS’s caution highlights a key credibility challenge for fiscal policy, the gap between ambitious revenue targets and the structural weaknesses in Ghana’s tax system. With the economy still recovering from the debt restructuring programme, the risk of under-performance could complicate fiscal consolidation plans and investor confidence.
