Ghana could have generated an additional US$6.56 billion in mining revenue in 2025 if it had adopted a revenue collection model similar to Botswana’s, the Institute for Fiscal Studies (IFS) has disclosed.
The institute says the country’s limited participation in mining operations has significantly constrained government earnings from the extractive sector, despite the substantial value generated by mineral production.
Presenting findings from a reassessment of Ghana’s revenue mobilisation performance, IFS Executive Director, Dr Said Boakye, said the government collected only US$1.6 billion from a mining sector that generated an estimated US$13.4 billion in value added in 2025.
This represented just 11.9 per cent of the sector’s total value added, compared with the 60.9 per cent revenue mobilisation ratio achieved by Botswana in its mining sector.
According to Dr Boakye, applying Botswana’s mining revenue mobilisation rate to Ghana’s mining sector would have generated approximately US$8.16 billion for the government in 2025, instead of the US$1.6 billion collected.
He said the resulting US$6.56 billion shortfall alone would have increased Ghana’s total revenue-to-GDP ratio from 15.7 per cent to 21.54 per cent, exceeding the Sub-Saharan African average of 20.1 per cent.
The IFS executive director argued that the difference between Ghana and Botswana was largely attributable to the latter’s direct involvement in mining operations through partnerships with private investors.
He explained that Botswana’s government benefits not only from corporate income taxes and royalties but also from substantial dividends generated through its participation in mining businesses.
Ghana, by contrast, relies largely on private companies operating mineral concessions, limiting the state’s direct participation in the profits generated by the sector.
Dr Boakye illustrated the disparity using average mining revenue figures between 2019 and 2023.
During the period, Ghana’s mining sector generated an average annual value added of US$5.03 billion, but the government collected only US$729.6 million, representing approximately 15 per cent.
Botswana, despite having a smaller mining sector with average annual value added of US$2.81 billion, collected approximately US$1.72 billion, equivalent to 60.9 per cent of its mining value added.
He said this meant Botswana generated 135.7 per cent more government revenue from mining than Ghana, despite having a mining sector that was 44.1 per cent smaller.
### Ghana’s Wider Revenue Mobilisation Gap
Beyond mining, the IFS identified Ghana’s overall revenue mobilisation performance as significantly weaker than that of several African countries.
Dr Boakye said Ghana’s revenue-to-GDP ratio stood at 15.7 per cent, compared with the Sub-Saharan African average of 20.1 per cent and Botswana’s 29.5 per cent.
Out of 25 African countries assessed, Ghana ranked 18th.
He disclosed that Ghana collected GH¢224.88 billion, equivalent to US$17.91 billion, in 2025.
However, applying Botswana’s revenue-to-GDP ratio to Ghana’s economy would have generated GH¢423.76 billion, or US$33.69 billion, representing an additional US$15.78 billion.
The IFS attributed the revenue gap to several structural weaknesses, including tax evasion, under-reporting, tax avoidance, corruption and excessive tax incentives.
Dr Boakye cited revelations by the Commissioner-General of the Ghana Revenue Authority in April 2025 that the country lost more than GH¢11 billion at the ports through incorrect declarations involving the origin, classification and valuation of imported goods.
He also questioned the effectiveness of Ghana’s investment incentive regime, noting that the Ghana Investment Promotion Centre had identified as many as 31 income tax, customs and financial incentive packages.
These include 10-year income tax holidays for Free Zones enterprises, full exemptions on import duties and tax incentives for the automotive industry.
### IFS Calls for Government Participation in Mining
To address the revenue shortfall, the institute is recommending greater direct government participation in the extractive sector through investments and partnerships with private mining companies.
Dr Boakye said Ghana could adopt Botswana’s approach of partnering private investors or consider production-sharing agreements where the government lacks the financial capacity to invest directly.
He suggested that government could temporarily reduce some traditional public investment commitments, including infrastructure spending, and redirect resources towards strategic investments in the extractive sector to generate greater returns in the future.
He argued that improved revenue mobilisation would provide government with additional resources to finance infrastructure, improve public sector salaries and reduce dependence on borrowing.
The consequences of weak revenue mobilisation, he said, were reflected in Ghana’s infrastructure and income indicators.
He cited the 2025 IMD infrastructure ranking, in which Ghana scored 10.1 out of 100, compared with Botswana’s 28.3 and South Africa’s 20.3.
He also pointed to Ghana’s per capita income of US$2,419 in 2020, significantly below Namibia’s US$4,502, South Africa’s US$6,267 and Botswana’s US$7,650.
Dr Boakye maintained that Ghana’s challenge was not necessarily a lack of natural resources but the inability to generate adequate public revenue from the resources already being exploited.
“Ghana does not need to discover new resources. It needs to collect what it is already owed from the resources it has,” he said.
