A Conference on Moving Beyond Aid–Revenue Mobilization G20–Compact with Africa is underway in Accra.
The two-day Conference, which is being organized by the Africa Centre for Economic Transformation (ACET) in collaboration with Ministry of Finance and the International Monetary Fund, is on domestic revenue mobilization as a pillar in moving Ghana beyond aid.
The conference brings together senior government officials, representatives of revenue agencies from eight countries in the sub-region namely, Benin, Cote D’ Ivoire, Egypt, Ghana, Guinea, Rwanda, Senegal, and Tunisia as well as Development Partners, experts and representatives of the Civil Society.
The conference provides CWA countries a common platform for knowledge sharing and peer-to-peer learning on revenue mobilization as well as ways to overcome aid dependence, ease financing constraints and enhance growth prospects – all key elements to achieve prosperity without jeopardizing debt sustainability.
The conference is also expected to help CWA countries deal with institutional and political constraints in revenue mobilization, improving tax compliance, and alleviating base erosion and profit shifting by multinational companies. It will focus on common domestic revenue mobilization (DRM) challenges and propose short and medium-term growth-friendly revenue-enhancing solutions.
The eight countries have signed on to the G20-Compact with Africa (CWA), which was launched, following the G20 Africa Partnership Conference in Berlin and the G20 Summit in Hamburg, Germany. The objective was to support Africa Compact countries to improve macroeconomic, business and financial framework for attracting private investment; strengthen their public sector financial and debt management, and to encourage private investment from G20 countries.
Delivering the keynote address at the opening of the conference in Accra, yesterday, Ghana’s Vice President, Dr Mahamudu Bawumia made it clear that President Nana Addo Dankwa Akufo-Addo’s vision of moving Ghana beyond aid was not mere rhetoric but a reflection of the reality, as aid and donor fatigue grew.
Dr Bawumia said government could not continue to build schools to educate the nation’s children, provide adequate health services, provide safe and adequate water, provide sanitation services and provide law and order on the inexhaustible charity of donor projects.
Domestic revenue mobilization, he said, was, therefore, an integral part of President Akufo-Addo’s vision of a Ghana beyond aid and that Government was making the necessary interventions to broaden the tax base and to develop Ghana using domestic revenues and ingenuity.
He mentioned the issuance of a National Identity Card, National Digital Property Addressing System and the use of a Tax Identification Number (TIN) to access key services, to broaden the tax base and reduce the tax burden on the estimated 1.2 million taxpayers in a population of about 27 million.
He called for more efficiency and a more transparent, prudent and accountable use and management of public resources to ensure rapid economic growth and transformation.
He said Ghana beyond aid was resting on five pillars, namely enhancing domestic revenue mobilization; encouraging higher private savings as a source of loanable funds to support domestic credit and capital market, and expand financial inclusion, leveraging the country’s resources buried deep in the ground for development in more innovative ways than the conventional model of royalty and tax regimes; and the innovative mobilization and use of external resources in the emerging development finance landscape.
Dr Bawumia noted that no fiscal mineral resource management could be robust without proper accountability and that a good system of property taxation should go with automation and digitization.
Furthermore, he said, prudent fiscal resource management would require eliminating the human interface in all transactions and the risk of collusive behavior, a check on illicit financial outflows such as the practice of transfer pricing among multilateral corporations and an end to unnecessary tax exemptions.
In his welcome remarks, Mr Ken Ofori-Atta Ghana’s Finance Minister, noted that to understand the main challenges to domestic revenue mobilization, and how to address them, it was important to interact with experts, and share country experiences with peers.
Mr Ofori-Atta stressed the need to transition to a new era in Fiscal Management, where domestic revenue mobilization and not international aid was the anchor of prudent and sustainable macro-fiscal management.
He said government had set itself an ambitious economic policy goal of transforming Ghana’s economy by moving it from taxation to production, the underlying idea of which, he said, was to abolish nuisance taxes and to, instead, use taxation as a fiscal tool to boost productivity in the economy, which should result in more revenue being collected, and, therefore, more funds available to finance development.
In addition, he said, strict adherence to the newly implemented Public Financial Management Act was expected to enhance fiscal transparency and protect the public purse.
Dr Ofori-Atta said the quest to move Ghana beyond aid would be a gradual and challenging process and expressed the hope that the conference would provide strategies and ideas to boost domestic revenue mobilization.
In a statement, Dr K.Y. Amoako, Founder and President, ACET, was optimistic that the objective of the conference would be met.