The Institute for Fiscal Studies (IFS) is calling for a major reset in Ghana’s revenue mobilization strategy, warning that the country’s reliance on the current concession system in the extractive sector is undermining government’s ability to generate sufficient income to fund critical programs.
Senior Research Fellow at the IFS, Mr. Leslie Dwight Mensah argued that switching from the concession regime to active state participation or adopting production sharing agreements (PSAs) would unlock far greater fiscal benefits. According to him, IFS studies show that PSAs and direct state involvement in production have “practically proven” to generate more substantial and sustainable revenues compared to the concession model currently in use.
He stressed that Ghana’s persistent revenue shortfalls, which have constrained implementation of key government initiatives, highlight the urgent need for such a reset. “The reset should take the form of paying greater attention to the extractive sector, where active state participation or production sharing agreements can significantly improve fiscal outcomes,” Mr. Mensah noted.
Beyond fiscal revenue, the IFS emphasized that greater state ownership in oil, gold and other mineral production would boost foreign exchange inflows, providing much-needed stability for the cedi. This, they argue, would create a more durable foundation for macroeconomic stability than short-term interventions.
The think tank was particularly critical of the government’s Gold Board initiative, which it described as inadequate in tackling the real revenue challenge. “The Gold Board does not address the fiscal revenue issue, because it merely buys and sells produced gold, disregarding the concept of public endowment of the gold resources,” Mr. Mensah explained.
IFS maintains that if the state held majority stakes in mining and oil operations, or shifted to production sharing models, the need for institutions like the Gold Board would diminish. “With the state having majority stakes or production arrangements, Ghana would automatically own and control most of the gold and oil produced in the country,” Mr. Mensah added.
The call comes as government continues to grapple with limited revenue inflows, rising debt service costs, and constrained fiscal space. According to IFS, without bold structural reforms in revenue mobilization, Ghana risks prolonging its dependency on external borrowing and missing opportunities to fully benefit from its vast natural resource wealth.
