Ghana's public investment agenda, aimed at expanding critical infrastructure and services, hinges on a stronger domestic revenue mobilization system, with taxation at its core. This is the key finding from experts at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), a German development agency. The nation's efforts to restore fiscal stability while investing in vital sectors like roads, education, and healthcare demand effective public financial management.
The Public Financial Management Act, 2016 (Act 921), serves as the legal backbone for planning, allocating, managing, and reporting public resources. This framework is essential for ensuring state funds are used efficiently and responsibly. GIZ officials underscore that Ghana's renewed focus on public investment makes robust taxation and sound public financial management increasingly critical for achieving its development objectives.
This emphasis on domestic revenue aligns with Ghana's broader economic narrative, which seeks to reduce reliance on external financing and build fiscal resilience. The country has faced significant economic challenges, including the impact of the COVID-19 pandemic. Strengthening internal revenue generation is a crucial step towards sustainable economic growth and self-sufficiency, a long-standing goal for the nation.
Dr. Aliu, a Technical Advisor at GIZ, explained that taxation remains central to development financing. He stated that a significant portion of government infrastructure projects are funded through tax revenue. Dr. Aliu also highlighted the media's vital role in helping citizens understand Ghana's tax system and public financial management framework, while holding public institutions accountable.
The implications of this focus are significant for Ghana's economic future. Increased tax compliance and efficient collection could unlock substantial funds for development projects, potentially accelerating economic transformation. Decision-makers will need to focus on transparent public financial management and effective communication to build public trust in the tax system. This approach is vital for sustaining the momentum of public investment.
Dr. Juergen Eheke, Component Manager of the GIZ Participatory Accountability and Inclusive Economic Reform (PAIReD) programme, urged Ghanaians to consider the country's development progress from a broader historical perspective. He acknowledged the impact of the COVID-19 pandemic but noted Ghana's significant progress since independence. Dr. Eheke suggested that while Ghana is on track, the pace of economic transformation could accelerate, citing Malaysia as an example of faster GDP per capita growth through sustained reforms.
GIZ has supported Ghana's structural reform agenda for several years. Dr. Eheke stressed that sustainable development requires consistent policy reforms, effective institutions, and robust public financial management systems. These remarks were made during a Public Financial Management (PFM) media engagement organized under the GIZ-PAIReD programme. The initiative aims to strengthen media capacity in reporting on taxation, budgeting, and public financial management, fostering informed public discussions and enhancing fiscal transparency.