The nation is haemorrhaging over US$9billion each year due to corruption, tax evasion, smuggling and systemic inefficiencies across critical sectors – a figure that experts say threatens national development and undermines public confidence in government institutions.
At a public dialogue on revenue leakages, Professor Isaac Boadi, Dean-Faculty of Accounting and Finance, University of Professional Studies-Accra, laid bare the scale and sources of fiscal losses – calling for urgent structural reforms to stem the bleeding.
“Ghana is not broke – we are bleeding. But our real battle is not about political parties. It’s Ghana versus corruption. And until we win that battle, our fiscal stability will remain fragile,” Prof. Boadi noted.
According to his analysis, Ghana loses approximately US$9.02billion annually; with the largest drains coming from tax-related inefficiencies, illegal trade practices and natural resource mismanagement.
This amount is equivalent to six times the annual cost of government’s flagship Free Senior High School programme, and nearly five times the National Health Insurance Scheme’s budget allocation.
The Ghana Revenue Authority (GRA) alone is estimated to lose around US$3billion every year – representing 30 percent of its potential collections – due to illicit financial flows, with high-net-worth individuals and foreign firms exploiting legal loopholes.
Customs-related corruption, including under-invoicing and port malpractices, account for an additional US$515million based on a 2023 World Bank report.
“The figures we are seeing annually are not just numbers. They represent classrooms unbuilt, medicines not purchased and the dreams of our young people deferred. Every cedi lost is a missed opportunity to change someone’s life,” Prof. Boadi stressed.
The mining sector also accounts for substantial losses. In 2022, Ghana lost US$2billion in taxes and royalties from the gold industry, with the Minerals Commission estimating that 60 percent of small-scale mining operations evade taxes.
The oil and gas sector contributed a further US$1.5billion of unaccounted-for revenues in 2023 due to opaque production-sharing arrangements.
In the forestry sector, illegal logging deprives the state of US$250million each year. The informal economy, which employs roughly 80 percent of the country’s workforce, is another area of concern – contributing to estimated losses of US$15.6million annually due to weak tax compliance.
Other sectors are not spared
The Ports and Harbours Authority reportedly loses US$250million annually through undervalued imports and collusion at entry points. Meanwhile, the public procurement process bleeds US$170million yearly through inflated contracts and unaccounted expenditures.
Prof. Boadi identified four root causes fuelling the problem: weak enforcement, outdated systems, entrenched institutional corruption and a lack of transparency.
“These loopholes are systematically exploited by corporations and elites. Manual processing systems and human interfaces make it easy for corruption to thrive,” he said.
To reverse the trend, he called for a multi-pronged solution anchored on digitalisation, strict sanctions, transparency and formalising the informal economy.
“We must digitalise our entire revenue collection system. When you eliminate the human interface, you reduce the opportunities for corruption and boost efficiency,” he urged.
He also called on government and civil society to take a united stand. “The data is clear. The victims are real. The solutions demand courage from all stakeholders – government, private sector and citizens alike. We cannot afford silence any longer,” stressed.
Despite the bleak figures Prof. Boadi noted modest progress, citing the recent tax-to-GDP ratio figure of 15.9 percent in 2024. However, he warned that real impact will remain elusive unless institutional reforms are accelerated.
“The question is not whether we can solve this problem. It is whether we are ready to confront it with the urgency and honesty it demands,” he remarked.
Source: thebftonline.com
Discussion about this post