Ghana’s ability to mobilise domestic revenue has come under renewed scrutiny following figures from the Institute for Fiscal Studies (IFS), indicating that the country’s revenue-to-GDP ratio stood at 15.7 per cent in 2025, compared with the Sub-Saharan African average of 20.1 per cent.
The figures have triggered discussions about the factors accounting for Ghana’s performance and the country’s capacity to generate sufficient domestic revenue to finance national development.
Speaking in a phone interview on Ahotor 92.3 FM’s Afternoon News, tax expert Professor Frank Yaw Gbadago explained the significance of the revenue-to-GDP ratio and the factors that could influence a country’s ability to mobilise revenue.
He explained that the tax-to-GDP ratio measures the proportion of a country’s economic output collected as tax revenue within a particular year, providing an indication of its capacity to generate domestic resources.
According to him, understanding the ratio requires looking beyond the amount of tax collected by government to consider the country’s productive capacity and how effectively economic resources are utilised to generate income.
Investment in productive sectors
Professor Gbadago highlighted the importance of investment in physical and human capital in strengthening economic productivity and creating sustainable sources of revenue.
He explained that investment in physical assets, including infrastructure and productive facilities, could support economic activities and expand the country’s capacity to generate income.
He also emphasised the role of human capital development through education, skills training and capacity building, noting that equipping people with relevant skills was essential to improving productivity and contributing to economic growth.
According to him, the relationship between economic output, investment and productivity is important in understanding why a country may record a particular revenue-to-GDP ratio.
Broadening Ghana’s revenue base
His explanation points to the need to examine domestic revenue mobilisation within the broader context of economic productivity, investment and the development of human capital.
The discussion also highlights the importance of strengthening the productive sectors of the economy to expand income-generating activities and create a broader base from which government can mobilise revenue.
Ghana’s 15.7 per cent revenue-to-GDP ratio, compared with the regional average of 20.1 per cent, therefore raises questions about the factors influencing the country’s revenue performance and the measures needed to improve domestic resource mobilisation.
Story by Beatrice Amoah