Employees in the Ministry of Finance in Ghana

    Core area “Peaceful and inclusive societies” Decentralisation and improved public financial management

    Compared with other countries in the region, Ghana’s tax-to-GDP ratio (about 13 per cent) is relatively low. Options for generating more revenue are not being fully used. This means that considerable funding for the public budget is being lost. Ghana’s government is engaged in efforts to build the capacity of national, regional and local administrative institutions and to build up government expertise in the financial sector. These efforts are being supported through German development cooperation.

    Areas of activity are decentralisation and municipal development, support for civil society and capacity building for administrative bodies. Among other things, Germany is participating at the district level in an incentives-based financing system for municipal investments.

    The Ghanaian government is receiving support for its efforts to adapt its tax, financial and budget systems in line with the principles of good governance. This includes boosting domestic revenue, modernising the tax system, improving budget preparation and strengthening national accountability to parliament and to the supreme audit institution. These activities are making an important contribution to combating corruption.

    Impacts

    Since 2017, with German assistance, around 5.7 million taxpayers have been registered. From 2017 to 2020, Ghana’s tax revenue increased by more than 37 per cent to 44 billion Ghanaian cedis (about 6.2 billion euros).

    Between 2014 and 2021, across the country more than 6,000 individual projects to improve social infrastructure (schools, clinics, sanitation) were supported via a District Development Fund.


    As at: 19/01/2023