President of IMANI Africa, Franklin Cudjoe, has stirred up fresh debate over Ghana’s controversial Electronic Levy (E-Levy), proposing that instead of abolishing it, the government should transform it into a national savings and pension fund for Ghanaians.
In a post on X (formerly Twitter), Cudjoe questioned the logic behind scrapping the tax entirely, arguing that it could instead be repurposed into a long-term financial safety net.
“Rather than cancelling the E-Levy, why not turn it into a universal pension fund that actually benefits Ghanaians? This way, we are not just taxing transactions but building wealth for the future,” he stated.
His proposal, developed with insights from Axis Pensions, seeks to use E-Levy revenue to establish the Ghana Universal Pension (GUP-Tier 4)—a fund that would not only help individuals save for their retirement but also provide the government with a sustainable financial resource to support development initiatives.
A Fresh Take on Ghana’s Economic Woes
Ghana’s economy has been under immense strain, grappling with high debt levels, rising inflation, and limited access to international financial markets. The National Democratic Congress (NDC) has promised to abolish the E-Levy if elected, but Cudjoe believes this would be a missed opportunity.
“Yes, people don’t like the E-Levy, but what if they could actually see their money working for them? What if instead of just paying a tax, they were building a nest egg for the future? That changes the conversation,” he explained.
Under the proposed scheme, contributions from the E-Levy would be split into two sub-accounts:
- A Retirement Sub-account, where funds are locked for at least 10 years, ensuring long-term financial security.
- A Savings Sub-account, which allows voluntary contributions from individuals, families, or even employers, with structured withdrawal options.
The funds wouldn’t just sit in an account gathering dust. According to Cudjoe, they would be strategically invested in high-impact sectors such as agriculture, infrastructure, and manufacturing, driving economic growth and creating jobs.
A Potential Game-Changer for National Savings?
Currently, only two million out of Ghana’s 13-million-strong workforce contribute to pensions, with total pension fund assets standing at just $4.3 billion—far behind other African countries like Nigeria ($28 billion) and South Africa ($213 billion). Cudjoe’s plan aims to change that.
“If we are serious about financial security and development, we must rethink how we mobilize domestic capital. Relying on foreign loans will not save us,” he emphasized. Analysts estimate that if the plan is implemented, Ghana could build over GHS 170 billion in pension assets within 15 years—money that could help finance infrastructure projects and reduce reliance on external loans.
The scheme would be managed as a public-private partnership, with an independent board overseeing operations to ensure transparency. Contributors would also be able to track their savings in real time via digital platforms, giving Ghanaians full visibility over their funds.
What’s Next?
For now, it remains to be seen whether policymakers will embrace it. With Ghana at a financial crossroads, Cudjoe argues that innovative solutions like this are needed now more than ever.
“We can’t keep taxing people without offering them something in return. Let’s be bold. Let’s be smart. Let’s make the E-Levy work for the people,” he concluded.
