The Institute of Economic Affairs (IEA) in Ghana has warned that the government's reduction of the Growth and Sustainability Levy (GSL) from 3% to 1% risks undermining efforts to maximize national benefits from the country's natural resources. The levy, a key fiscal instrument, was designed to ensure a fair share of revenue from resource exploitation for sustainable development.
According to the IEA, the significant cut, implemented as part of the 2025 budget, could reduce the fiscal space needed for critical investments in infrastructure, social services, and economic diversification. The institute argues that maintaining a robust revenue stream from extractive industries is essential for Ghana to avoid the "resource curse" and translate natural wealth into long-term prosperity for its citizens.
The warning was delivered by IEA Senior Economist, Dr. John Kwakye, during a press briefing in Accra. He emphasized that while tax relief can stimulate business activity, the drastic reduction on a levy tied to natural resources requires careful consideration of the potential trade-offs against national developmental goals and intergenerational equity.
