IEA, Sophia Akufo questions government’s reduction of growth and sustainability levy

The Institute of Economic Affairs (IEA) has described the government’s decision to cut the Growth and Sustainability Levy from three per cent to one per cent as a step that could undermine Ghana’s efforts to maximise benefits from its natural resources.

At a press briefing in Accra, the policy think tank argued that the reduction—intended to ease the burden on investors—runs counter to a global trend where resource-rich countries are asserting greater ownership and demanding enhanced national benefits from extractive sectors.

A Distinguished Fellow of the IEA, former Chief Justice Sophia Akuffo, questioned the consistency of the government’s fiscal approach.

“Why did government increase royalties, ostensibly to capture greater value from Ghana’s mineral wealth, only to simultaneously dilute that gain through tax concessions?” she asked.

Justice Akuffo said the reduction weakens the broader objective of ensuring Ghana derives maximum value from its extractive sector, and called for coherent and predictable fiscal policies aligned with long-term national interests.

She also expressed concern that despite the country’s vast natural resource endowment, Ghana has repeatedly turned to the International Monetary Fund for financial support. She described as worrying the recent announcement by the Finance Minister of plans to borrow GH¢17 billion to pay salaries, urging the state to instead leverage its mineral wealth for national development.

Justice Akuffo pointed to countries such as Botswana, Burkina Faso, Chile and Venezuela as examples of nations adopting models focused on resource ownership and value retention.

“These developments have shown that asserting sovereignty does not repel investment; rather, it redefines the terms of engagement in favour of national development. They also show that Africans have woken up, and Ghana must join the awakening,” she stated.

She stressed that the expiration of more than 30 mining leases, record-high global mineral prices and the discovery of new critical minerals present Ghana with a rare opportunity to reset its resource governance framework. She recommended engaging both local and foreign private sector expertise through service contracts that preserve national control while maximising economic benefits for industrial transformation.

The IEA therefore urged the government to adopt consistent fiscal policies that strike a balance between maintaining investor confidence and safeguarding national development priorities, ensuring that Ghana’s natural resource wealth translates into sustainable economic growth.