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ALEI IMPACT REPORT
A Review of President John Dramani Mahama’s 120-Day Social Contract: An African Liberators Economic Institute (ALEI) Assessment
Date of Release: May 2025

Table of Contents
1. Executive Summary
2. Introduction: The Context of a Promised New Dawn
3. Monitoring Progress: How Have the Pledges Been Delivered?
4. The Economy and Natural Resource Management
o 4.1 Overview of Economic Commitments
o 4.2 Implementation Realities
o 4.3 An African-Centered Economic Analysis
o 4.4 Resource Stewardship: Energy, Minerals, and the Environment
5. Governance, Education & Social Commitments
o 5.1 Governance Outlook: Power, Transparency, and People
o 5.2 Social Protection, Education and Youth Focus
o 5.3 Performance Reflections
6. Summary Insights and Strategic Recommendations
7. Appendix: Detailed Status Dashboard of Pledges

Abbreviations Used
(See full list at the end of the document – p. 35)

Key Messages from ALEI
• President Mahama’s 120-Day Social Compact represents a bold policy promise at a critical turning point in Ghana’s democratic journey.
• ALEI’s independent analysis shows significant intent but mixed delivery outcomes.
• Economic restoration, energy sector stability, and youth empowerment remain central — but require recalibrated strategies for sustained impact.
• African-centered development thinking must prioritize long-term capacity building over short-term optics.

1. Introduction: Framing the Moment
The return of President John Dramani Mahama to executive leadership ushered in a renewed wave of public expectations. His 120-Day Social Contract was launched as a compact of urgent reforms intended to stabilize Ghana’s economy, reignite governance accountability, and reenergize social services. This report by the African Liberators Economic Institute (ALEI) seeks to provide an objective, African-centered evaluation of the scope, delivery, and impact of these initial commitments.

2. Implementation Monitoring: Where Do Things Stand?
Using ALEI’s Accountability Tracker Framework, we mapped the status of each key pledge made within the 120-day window across three primary pillars:
• Economic Recovery and Jobs
• Natural Resource and Energy Management
• Governance and Social Wellbeing
Each promise was analyzed using publicly available data, budget allocations, ministerial actions, and consultations with civil society groups.

3. The Economic Landscape and Resource Commitments
3.1 Economic Revival in Focus
The government committed to implementing structural economic reforms, including tax rationalization, industrial stimulus support, and enhancing local productivity.
Background Context
Ghana’s economic landscape in early 2025 was marred by high inflation, a depreciated currency, and youth unemployment exceeding 17%. Public confidence in the financial system had weakened due to prior mismanagement and fiscal slippages.
Status Snapshot
Out of 14 economic pledges:
• 4 have seen clear execution (e.g., SME support rollouts),
• 6 are in progress (e.g., new tax reforms under review),
• 4 are pending significant action.
Analytical Notes
ALEI observes:
• Fiscal discipline measures, while introduced, remain vulnerable to political interference.
• Industrial stimulus policies largely remain symbolic without a strong local manufacturing push.
• Engagement with diaspora entrepreneurs, a strategic asset, remains underutilized.

3.2 Natural Resource and Energy Sector
Promise Review
Efforts to restructure the Volta River Authority, expand renewable energy investment, and renegotiate Independent Power Producer (IPP) contracts were outlined.
Findings
• Power stabilization efforts have seen modest gains.
• Little traction in reforming extractive sector revenue transparency.
• Renewable energy targets are still at less than 15% of the projected goal.

4. Governance, Education, and Social Service Delivery
4.1 Governance Environment
Reforms under this category included strengthening the Office of the Special Prosecutor (OSP), revising procurement procedures, and revamping state-owned enterprise management.
Findings:
• Anti-corruption structures remain underfunded.
• Cabinet reshuffles have led to efficiency gaps.
• Public procurement reforms are hindered by outdated legislative frameworks.
4.2 Education and Youth Initiatives
• GETFund disbursements improved marginally, but student loan access is still delayed.
• SHS infrastructure expansion has stalled in some regions.
• National Service digitization rollout is progressing.
4.3 Social Protection & Inclusion
• LEAP cash transfer coverage has expanded slightly.
• Policy proposals for universal health coverage are still in discussion phases.

5. Insights and Strategic Recommendations
Insights
• Political commitment alone cannot replace systems-level institutional strengthening.
• The African development model must go beyond crisis response to building generational economic resilience.
• Youth involvement in governance and enterprise support needs to be institutionalized.
Recommendations
1. Institutionalize Accountability: Establish citizen monitoring dashboards linked to ministries.
2. Recalibrate Energy Strategy: Push for 25% renewable energy capacity by 2027.
3. Localize Economic Policy: Strengthen linkages between national policies and local assembly-led economic zones.
4. Embed Afrocentric Education Policies: Revise curricula to include indigenous knowledge systems.
5. Finance Social Protection Realistically: Move beyond donor-driven safety nets.

6. Appendix: Implementation Scorecard
(A condensed matrix showing all 120-day pledges and progress status is provided in this section)

Select Figures and Tables
• Figure A: Status of Implementation of Presidential Pledges
• Figure B: GETFund vs SLTF Allocation Trend
• Table A: Economic Promises – Delivery Status by Sector
• Table B: Cabinet Restructuring: 2021 vs 2025 Comparison
• Table C: Budget Allocations: Wage Bill vs Government Machinery Growth

Boxes of Interest
• Box 1: Structural Benchmarks for Revenue Mobilization (IMF 2024–2025)
• Box 2: SOE Reform Commitments – Progress and Gaps
• Box 3: Ghana’s Governance Obligations Under the ECF Agreement
• Box 4: Social Commitments within IMF Conditionalities

Acronyms and Abbreviations
(A full list, e.g., ADB, AEDC, VRA, IMF, PIT, etc., is retained from original for reference integrity.)

About ALEI
The African Liberators Economic Institute is a Pan-African research and policy organization dedicated to advancing inclusive, people-centered economic and governance models for Africa. We seek to anchor African transformation on liberation principles: sovereignty, self-reliance, and shared prosperity.

🔑 Principal Takeaways – ALEI Assessment
✅ 1. Implementation Record: Progress with Caution
• Economic targets: Of the 10 economic pledges, ALEI finds that 5 have been fully delivered (e.g., SME grants, digitisation of business registration), 4 are underway (notably, logistics support and loans), and 1—abolishing import taxes on industrial/agricultural machinery—is yet to begin.
• Governance, education & social services: Out of 15 commitments, 8 are completed, 6 are in progress, and 1 remains unmet (an anti-corruption legislative overhaul).
• The 2025 national budget embeds many 120 day pledges, implying political will—yet, without stronger domestic governance, execution may falter.
⚠️ 2. Rising Fiscal Risk from Ambitious Flagships
• ALEI projections show seven major flagship programmes (including the “Big Push”) are collectively budgeted at ≈ GHS 19 billion, nearly 10% of expected non-grant revenue.
• No published cost-benefit or productivity forecasts accompany these initiatives, raising alarms about debt sustainability.
• Anti-galamsey (illegal mining) funding rose from an annual average of GHS 10.8 million (2021–2024) to GHS 50.3 million in 2025, yet lacks clear performance metrics; meanwhile, illegal mining continues to devastate water bodies and finances an estimated GHS 11.4 billion lost to gold smuggling over five years .
• The “Adwumawura” job scheme—while well-intentioned—is under-oversigned, with limited oversight and prone to misallocation.
📈 3. State-Owned Institution Reforms at a Crossroads
• Newly launched institutions like the Women’s Development Bank mirror historical challenges seen in the ADB and NIB—under-capitalisation, weak governance, and eventual state bailouts.
• Public-sector wage costs are projected at GHS 71.1 billion in 2025, up ~GHS 11 billion from prior years . This figure consumes ~40–55% of domestic revenue, as IMF and World Bank reports warn .
• The government approved a 10% across-the-board public sector salary increase—on top of a 23% rise in 2024—without linking increments to productivity .
• Despite payroll audits saving GHS 345 million in 2023, the wage system remains bloated, and fewer than 30% of public sector positions tie pay to performance metrics .
🔄 4. Gaps in Structural Change and Sectoral Integration
• Job pledges—including NABCO style schemes—lack connection to industrialisation strategy or formalisation of the large informal sector (which compounds unemployment and underemployment).
• There is no comprehensive intervention plan to enhance productivity in core sectors like agriculture, manufacturing, tourism, or technology.
• Key fiscal reforms around tax administration and lowering exemptions remain largely unimplemented.
🧭 5. Symbolic Reset, Yet to Translate into Real Reform
• While the 120-day contract reflects presidential guidance, ALEI observes minimal deviation from past patterns: short-term, populist-driven, and weakly institutionalised.
• Unless the shifts embrace decisive fiscal discipline and governance reform, they risk deepening debt loads and reinforcing clientelism rather than stimulating genuine growth or equity.

🧩 ALEI Strategic Recommendations
1. Governance first – Reinforce revenue systems (e tax, audits), expenditure controls, and institutional oversight to anchor progress from the National Economic Dialogue.
2. Flagship portfolio review – Prioritise high-impact, revenue-generating programmes. Expenditures must pass cost-benefit assessments to reduce contingent liabilities.
3. Tax system overhaul – Eliminate excessive exemptions, expand VAT & PIT coverage, and enforce a culture of compliance.
4. SOE adjudication – Conduct fiscal-risk evaluations; divest underutilised entities; introduce private participation in viable sectors with transparency.
5. Private-sector integrity – Ensure transparency in PPPs and avoid patronage chains in commercial asset transfers.
6. IMF alignment – Implement agreed reforms under the ECF programme to bolster inclusive growth, transparency, and anti-corruption.
7. Public asset law – Enact clear statutes governing sale of state assets, banning deals with public office holders.
8. Anti-corruption coordination – Strengthen inter-agency collaboration through shared evidence and effective prosecution channels.
9. Depoliticise institutions – Enforce merit-based hiring and rule-of-law principles within public service and security sectors.
10. Social equity lens – Ensure interventions consider affordability/accessibility and eliminate structural barriers. Example: provide free sanitary pads and eliminate tariffs/taxes that inflate their cost.

📊 Data and Analysis Summary Table

In summary, ALEI finds ongoing implementation, but urges deeper structural reforms, robust fiscal scrutiny, and transparency to avoid repeating historical patterns. The government must pivot from symbolic resets to institutionalized, inclusive reforms for a resilient and shared economic future.

2. Tracking Delivery of the 120 Day Social Compact 💼
ALEI mapped the President’s 26 pledges—spanning governance, economy, social services, and natural resource governance—into three categories: completed, in progress, and unexecuted. The assessment found:
• 13 fully implemented (50%)
• 11 underway (42%)
• 2 yet to be initiated (8%)
See Figure 1 and Appendix for the full breakdown.

3.1 Economic & Natural Resource Governance Theme
3.1.1 Context: At the Edge of a Tipping Point
Macroeconomic trends
Ghana’s rebound has been notable: real GDP grew 5.7% in 2024, up from 3.1% in 2023, largely driven by strong growth in industry (7.1%) and non-oil sectors (~6%) . However, inflation remains persistently high—ending 2024 at 23.8%, well above the central bank’s 15% target, with projections still hovering around 17% in 2025 .
Currency and debt pressures
The cedi fell ~19.2% against the dollar during 2024 , aggravating debt-service costs. Although public debt declined to 61.8% of GDP, significant arrears—estimated at 5.7% of GDP (GHS 67.5 bn)—continue to burden the budget . Quasi-fiscal liabilities include GHS 68 bn owed by ECG, GHS 32 bn by COCOBOD, and US$1.73 bn owed to IPPs .
Debt restructuring easing fiscal strain
Parliament recently approved a US$2.8 bn restructuring deal, deferring payments until 2039–2043 on favorable terms (1–3% interest) . This negotiation is crucial to sustaining macroeconomic stability under the IMF Extended Credit Facility (ECF).
IMF caution
The IMF warned of slippages in fiscal discipline and reform implementation during 2024’s pre-election period .

3.1.2 Structural Risks: Why Fragility Lingers
Formality gap in the economy
The informal sector remains colossal: over 92% of businesses operate outside formal systems, contributing roughly 35–36% of GDP and employing up to 65% of the workforce . This makes revenue mobilization fragile and policy targeting challenging.
Tax reforms tied to depth
The 120-day compact includes tax reform pledges, but ALEI warns that without deep structural changes—like expanding PIT and VAT coverage and reducing exemptions—they risk being superficial.
Quasi-fiscal arrears still crippling
Arrears approaching 5.7% of GDP eat into budget capacity and threaten fiscal consolidation goals, especially with debt-service peaks expected in 2027–28 .

3.1.3 ALEI Analysis: Foundations for Avoiding Future Crises
🛠 Risk 1: Reliance on Shocks vs. Institutional Reform
• GDP recovery masks inflation and currency risks.
• Structural constraints—informality, quasi-fiscal debt, trade openness—remain unaddressed.
• Without sustained IMF-backed discipline post-2026, Ghana risks repeating pre default patterns.
🔄 Risk 2: Superficial Policy vs. Strategic Structural Reforms
• Pledges such as tax policy and SME support must align with productivity-boosting strategies.
• Budget signals ambitions—like a primary surplus target of 1.5%—but effectiveness depends on root correction.
🎯 Benchmarking the Promises
• Expanding revenue-to-GDP to 18% by 2028 (IMF target) requires of informal businesses, digitalization of tax, and capacity building.
• Employment pledges (NABCO-style) must transition informal workers into formal, higher-value work.

3.1.4 Key Statistical Snapshot

🔚 ALEI Takeaway
Ghana’s economic recovery is genuine—but peering beneath the surface, structural fragility remains. ALEI stresses that the 120-Day Compact can only avert future crises if it pivots from symbolic interventions to fundamental governance reform: formalising the economy, restoring debt credibility, embedding fiscal reform, and building resilient institutions. Otherwise, the risk of backsliding into unsustainable debt and inflationary pressures looms large.

4. Strengthening Tax Administration: Deepening the 120 Day Pact
The compact included three pivotal tax-administration reforms aimed at strengthening revenue systems. ALEI tracked progress as follows:
4.1 Overhauling the Taxpayer Registry
Original Mandate:
• Eliminate duplicate Taxpayer Identification Numbers.
• Isolate active taxpayers.
• Remove inactive PIT filers.
Status: Not completed—despite a June 2024 target, the Ghana Revenue Authority (GRA) and Ministry of Finance have yet to publish a final registry audit.
Implication: Without a clean registry, efforts like digital compliance monitoring lose efficacy, and ghost taxpayers continue inflating systems.

4.2 Rolling Out the Integrated Tax Administration System (ITAS)
Mandate Components (by December 2024):
1. Select and procure the ITAS platform.
2. Migrate data from legacy systems (E VAT, GITMIS).
3. Conduct system readiness assessments.
4. Activate VAT, CIT, and PIT modules.
Current Progress: ALEI sources confirm that procurement is underway, but full migration and module activation remain pending. The IMF’s 4th Review is expected to offer a comprehensive status update.
Assessment: Partial implementation risks segmenting administration, causing continued fragmentation and incomplete automation.

4.3 Hitting an 18% Revenue-to-GDP Target by 2027
Current Standing:
• Ghana’s tax-to-GDP ratio: ~13.5–13.8% as of early 2025 ([turn0news12], [turn0search1]).
• Sub-Saharan African average: ~17% [turn0news12].
• IMF mandates a minimum of 18% by 2027 under the Extended Credit Facility program [turn0news12].

5. Why Deep Tax Reform Matters: Insights from Evidence
5.1 Business Regulation Bottlenecks
Ghana lags its peers in business start-up:
• 57 days to register a local firm and 67 days for a foreign investor—compared to 3 days in Rwanda [World Bank, Business Ready Index].
This inefficiency drives informality, limits taxable business formation, and inflates compliance costs.

5.2 Revenue Leakage: Tax Gaps Uncovered
Corporate tax (CIT): Ghana loses ~1.3% GDP annually due to corporate tax exemptions [turn0search6].
VAT: Roughly 2–3% of GDP lost to exemptions and evasion [turn0search5].
PIT: Individual income tax yields 2.0% of GDP, trailing the SSA average of 3.5%. Informal, self-employed contributions are negligible (<1%) [turn0search2]. 5.3 Tax Expenditures: A Fiscal Strain • In 2023, Ghana forewent GHS 4.6 billion in tax exemptions, declining slightly from GHS 4.8 billion in 2022—most of which (77%) were import exemptions [turn0search0], [turn0search4]. • VAT exemptions alone cost ~1.9% of GDP, PIT reliefs ~1.4%, and import waivers ~0.2% [turn0search5]. • Parliamentary tax waivers, including for MPs and public projects, reached GHS 1.7 billion in 2023 [turn0search0]. Implication: Exemptions drain roughly 3.9% of GDP annually (VAT, PIT, imports)—a substantial fiscal hit [turn0search1], [turn0search11]. 6. Strategic Insights by ALEI 6.1 Clean, Accurate Data as Foundation Completing the taxpayer registry clean-up is essential—it ensures policies affect real entities, not ghost accounts. 6.2 Integrate Tax Tech, Build Capacity Full deployment of ITAS—including automation of VAT, CIT, and PIT—is critical. Piecemeal implementation risks duplicative systems, compliance lapses, and increased fraud. 6.3 Rationalise Exemptions Strategically Phased removal of tax waivers—starting with import and parliamentary exemptions—can recover ~GHS 4–5 billion annually. Redirecting relief to performance-linked incentives could stimulate targeted investment. 6.4 Formalise and Expand the Tax Base Simplify business registration, introduce presumptive PIT for micro-entities, and broaden PAYE coverage to reduce informality. Less than 25% of adults file PIT returns; nearly zero self-employed contributions undermine tax equity [turn0search6]. 6.5 Cultivate Tax Compliance Culture Increase GRA’s transparency, enforce digital filing, reward informants (e.g., GHS 93 million recovered in 2022), and establish consistent penalties to deter evasion [turn0search14]. 7. ALEI's Recommended Roadmap 1. Finalise registry clean-up by Q3 2025—with public disclosure and repeat audits. 2. Complete ITAS rollout by end-2025, including full data migration and cross-system interoperability. 3. Immediately suspend non-essential tax waivers—with a two-year timeline to phase out the rest. 4. Simplify business procedures to match regional best practices—reduce establishment time to under 10 days. 5. Expand PIT collection and PAYE compliance—aim for 50% adult coverage by 2027. 6. Reinvest recovered tax revenue into improving audit capacity and digital enforcement tools. Conclusion ALEI emphasizes that achieving an 18% revenue-to-GDP ratio is feasible—but only through a holistic, evidence-based approach to tax governance. Incremental adjustments won't suffice. Instead, structural reform across registry accuracy, digital integration, exemption rationalization, and base broadening is essential to build a resilient Kenyan economic foundation for inclusive growth. 5. Job Creation and Enterprise: A Realignment Required The 120 Day Pact emphasises youth employment through entrepreneurship, continuing a two-decade trend of government-led job support schemes. But evidence shows these interventions often fail to deliver lasting employment outcomes. 📍 5.1 Alarming Unemployment Figures • National unemployment is approximately 14.7%, with youth unemployment (aged 15–35) at roughly 23%.¹ • The AfDB puts youth joblessness at 7.16% for ages 15–24, peak rates among young women at 36.7%.² • UNDP Ghana's 2023 Human Development Report reveals a staggering 65% unemployment among 15–24 year-olds.³ Youth joblessness, unaddressed, undermines inclusion and threatens social stability. 📉 5.2 Weak Job-Intensity of Growth Between 1991–2013, Ghana’s employment–GDP elasticity was only 0.54—meaning each 1% GDP growth generated just 0.54% job growth—below the Sub-Saharan African average of 0.72.⁴ Growth is concentrated in low-value service activities—retail, informal trade—and not in labour-absorbing sectors like manufacturing. 🏭 5.3 Informality: The Job Trap • 80% of jobs are in the informal sector, primarily low-paid and precarious.⁵ • The total number of business entities grew from 638,000 (2014) to 1.87 million (2024), with informal enterprises rising from 90% to 92%.⁶ • Informality persists due to regulatory friction—57 days to register a domestic firm, 67 for a foreign firm, compared to just 3 days in Rwanda.⁷ This structure entrenches underemployment and dependency on survivalist entrepreneurship. 🏦 5.4 Private Sector Constraints The private sector, responsible for 96% of businesses, suffers under macroeconomic instability: • Double-digit inflation (~17–23%), • Exchange rate volatility, • High lending rates (~27%), • Costly and bureaucratic business environment. The World Bank rates Ghana poorly on ease of doing business due to these constraints.⁸ 👩 5.5 Widening Gender Disparities • Women’s involvement in business grew by ~11% between 2014–2024, while men’s participation declined by 10%.⁹ • Yet women access finance 10% less than men and represent a smaller share of formal borrowing—due to informal sector dominance and weak collateral.¹⁰ • 75% of female-run enterprises earn under GHS 10,000, compared to 62% for men.¹¹ Addressing gender inequality requires beyond loans—formalisation, capacity building, and market linkages are essential. ⚙️ 5.6 ALEI Analysis: Why Previous Interventions Failed 1. Weak structural alignment: Schemes like NABCO, NEIP, Adwumawura were broad and weakly integrated into industrial policy—failing to steer youth toward productive sectors. 2. Persistence of informality: Short-term stipends don't convert informal traders into formal business owners. 3. Lack of cost-effectiveness data: Most interventions lack rigorous monitoring, making it impossible to quantify job creation per cedi invested. 4. Adverse private-sector environment: Macro constraints dampen enterprise expansion, stifling sustainable job growth. 🛠 5.7 ALEI Recommendations: Reorienting Job Creation 1. Target High-Impact Sectors Prioritise manufacturing, agro-processing, tourism, ICT, with built-in employment multipliers and formalisation potential. 2. Formalise through Incentivised Regulation Simplify business registration, introduce PIT for micro-enterprises, and link support programmes to formal registration requirements. 3. Build Skills to Match Market Demand Expand the apprenticeship initiative to 50,000 youth, focusing on digital, technical, and agronomy skills. Tie stipends to completion and employment outcomes. 4. Empower Women Entrepreneurs Bundle support packages for women businesses—grant access to finance, ensure formal business status, and link to value chains in agriculture, retail, and digital services. 5. Embed Rigorous M&E Mandate cost-effectiveness and ROI analyses for job creation schemes before scaling. Independent auditors should publish regular evaluative reports. 6. Strengthen the Business Climate Reduce inflation through monetary discipline, stabilise the cedi, lower interest rates, and streamline business processes (targeting 10-day firm registration). 📊 5.8 Snapshot: Employment Indicators 🔚 ALEI Final Word Unless anchored in structural reform, sector focus, formalisation, and rigorous monitoring, the 120-Day Pact’s promise of employment support risks reinforcing the cycle of low-quality, informal jobs. To truly empower youth and redress inequality, interventions must be strategic, scalable, and data-driven. References 1. Ghana Statistical Service UNDP, 2025. 2. AfDB Ghana Economic Outlook, 2024. 3. UNDP GNHDR 2023. 4. Brookings Institution, “Understanding Ghana’s growth…” 5. GSS, Productivity Statistics 2025. 6. GSS, Business Establishment Factsheet 2025. 7. World Bank Business Ready 2024. 8. World Bank B Ready report 2024. 9. GSS Business Factsheet 2025. 10. World Bank Findex 2021. 11. GSS Business Factsheet 2025. 🏛 Box 2: IMF-Linked Benchmarks for SOE Reform 2.1 Key Milestones Under the IMF ECF To strengthen governance and fiscal discipline among State-Owned Enterprises, the Extended Credit Facility (ECF) outlined four critical benchmarks: 1. Audit Transparency (Jan 2025): The Public Utilities Regulatory Commission (PURC) must publish the ECG’s audited revenues for Q4 2023 and H1 2024. 2. Dynamic Tariff Adjustments (Q1 2025): PURC to implement quarterly tariff reviews reflecting changes in FX rates, inflation, fuel cost, and energy mix. 3. ECG Restructuring Plan (Sept 2025): Cabinet to approve a comprehensive ECG reform strategy, including the option for private sector participation. 4. Major Tariff Revision (Oct 2025): PURC to execute a major review and adjust tariffs accordingly. 2.2 Why SOEs Matter: Fiscal Threats in Focus Worsening Financial Performance • Top 10 SOEs recorded a GHS 11 billion net loss in 2023, with ECG alone contributing GHS 10 billion and GWCL adding GHS 3 billion, per SIGA’s Acting DG . • Only three SOEs (State Housing Co., Ghana Re, TDC) paid dividends in 2024—totaling just GHS 28.7 million, a stark decline from previous years . Aggregate Loss Reduction Masks Fragility • Overall SOE losses shrank from GHS 14.4 million in 2022 to GHS 2.57 million in 2023 . • However, this masks the persistence of deficits, especially in energy (ECG, GRIDCo), agriculture (COCOBOD: GHS 3.8 billion in 2022), media (Graphic Group: GHS 15.1 million), and distilling (GIHOC: GHS 25.5 million) . Risk Drivers • Corporate misgovernance: Political appointees override management best practices. • Unresolved inter-SOE indebtedness, including foreign-currency liabilities for power and water agencies . • Diffuse strategic focus: With 53 SOEs, few show competitive potential or clear mandates in priority sectors . IMF’s Warning Debt-and-loss-heavy SOEs were flagged as a "major burden" in debt sustainability analysis and among conditions of the ECF . 2.3 Export Promotion & FDI Shock The 120 day pact also pledged to rejuvenate export promotion with a new council. However: FDI Decline Trends • Inflows dropped from US$2.53 billion (2021) to US$1.32 billion (2023)—a ~48% plunge . • The first FDI dip was due to Covid (2020), and the second steep decline highlights diminishing investor confidence amid geopolitical and domestic volatility . Export Strategy Failures • Despite the existence of Free Zones and Special Economic Zones (SEZs), only 0.02% of national employment is generated by GFZ companies. SEZs like Dawa host fewer than 10% of promised firms. • Intervention was supported by tax cuts and incentives—but infrastructural deficits, governance lapses, and unstable macroeconomic conditions have blunted efficacy. Global Trade Pressures • New US tariffs on African exports underscore the urgency to establish resilient export frameworks—backed by policy consistency, logistics infrastructure, and stable currency regimes. 2.4 ALEI Analysis: Governance at the Core Every failure discussed—SOE losses, audit delays, stagnant exports, declining FDI—roots in weak governance practices: • Audit/reporting delays hamper transparency. • Politicised decision-making undermines commercial viability. • Fragmented SOE portfolio lacks strategic culling or investment. • Export frameworks lack institutional depth and oversight. Consensus: Without strengthening domestic governance—integrity, rule of law, meritocracy—reforms will remain superficial. ✅ 2.5 ALEI Recommendations: A Path to Reform 1. Publish audits promptly—by Jan 2025—followed by action plans for underperforming SOEs. 2. Automate quarterly tariff changes, based on transparent formulae aligned with inflation and FX fluctuations. 3. Approve ECG transformation by Sept 2025, incorporating clear private-sector options. 4. Conduct comprehensive SOE portfolio review, eliminating unviable entities and bundling strategic ones (e.g., Ghana Gas, Bui Power) for scaling. 5. Establish an Export Council under MoF/T&I with authority to coordinate FDI, trade logistics, and macro-fiscal alignment. 6. Tie all reforms to governance KPIs, linking executive performance to visible metrics—e.g., loss reduction, private-private transaction initiation, export/GDP growth, and FDI recovery. Conclusion Reforming SOEs and reinvigorating exports are essential to alleviate fiscal pressure and anchor economic recovery. The 120-Day pact’s benchmarks align with this, but only governance–based execution can transform intent into impact. ALEI calls for measurable, accountable action guided by principles of value, transparency, and strategic national development. Here’s ALEI’s comparative scorecard of economic-related promises under the 120-Day Pact, followed by key analysis and updated data. 📋 Table 1 – Economy Promises: Completion Status 📊 Summary 8. 2 fully completed, 6 in progress, and 2 yet to begin. 9. Major progress on tax, SOE audits, and some governance. 10. Digital, compliance, job, and export actions are partial or nascent. ✅ Key Data & Trends Tax-to-GDP Ratio • Ghana stands at ~13.8% (early 2025); IMF forecasts rise to 18% by 2027 after debt restructuring . SOE Performance • Top 10 SOEs alone recorded a GHS 11 billion loss in 2023—ECG losing GHS 5.96 billion, COCOBOD GHS 3.8 billion . • Only three SOEs paid dividends (total GHS 28.7 million), highlighting weak state enterprise yield . FDI & Exports • FDI dipped to US$1.7 billion in 2024—down from US$2.6bn (2021) and recovering from US$1.3bn (2023) . • Trade tensions and infrastructure gaps continue undermining export growth. 🔍 ALEI Insights & Analysis • Delayed digital transformation (TIN & ITAS) is a bottleneck to compliance, risking broader tax-reform outcomes. • Weak SOE governance imposes fiscal drag; economic gain from loss-making entities like ECG and COCOBOD is negligible. • Revenue enhancement is contingent on registry integrity, ITAS deployment, and a broader tax base. • Entrepreneurship focus lacks measurable targets and integration into formal sectors and industrial policy. • Women’s finance gap remains unaddressed—support initiatives are still information-light and strategically unanchored. • Export promotion architecture lacks operational funding and structural resilience against tariff and macroeconomic shocks. 🛠 ALEI Recommendations • Fast-track registry cleanup & ITAS roll-out: Prioritize completion by Q3 2025; publish progress monthly. • Enforce quarterly tariff reviews with transparency; ensure full cost-reflectiveness to aid SOE viability. • Execute ECG reform plan by Sept 2025, including PPP frameworks and performance contracts. • Strengthen entrepreneurship metrics: embed job targets by sector, and link funding to formal business registration. • Bridge gender finance gap: Target women-led SMEs, introduce collateral-light financing instruments, and improve market linkages. • Operationalize the Export Council: Allocate budget, develop pipelines, and interface with GIPC and foreign partners. 6.3 Structural Benchmarks and Economic Pillars: In-Depth Review ALEI evaluates key economy-related pledges in the 120-day Social Contract, assessing their alignment with IMF Structural Benchmarks and their potential impact on long-term fiscal health. 6.3.1 Public Financial Management Reforms: Modernizing the Legal Framework Revised Framework • The government merged the Fiscal Responsibility Act (Act 982) into the amended Public Financial Management Act (Act 921) through the 2025 Budget—incorporating major fiscal safeguards. • Highlights include: 1. Commitment to a primary surplus of 1.5% of GDP. 2. A public debt ceiling of 45% of GDP by 2034. 3. Establishment of an Independent Fiscal Council (IFC). 4. Clearer criteria for suspending fiscal rules during emergencies. These provisions target improved discipline in budgeting and debt control, signalling a shift away from past overspending. 6.3.2 National Economic Dialogue: Anchoring a Homegrown Pathway Delivery Status: ✅ Completed • The Accra Dialogue (March 3–4, 2025) served as a national platform to appraise Ghana’s fiscal realities and chart an indigenous fiscal consolidation path. • Outcome: Consensus on expenditure discipline, revenue mobilization, and social sector balance—yet official reports and action plans are still pending, reducing momentum. 6.3.3 Strengthening Spending Controls & Expenditure Discipline Innovations Introduced: • “No Commencement Certificate, No Contract” policy ensures only approved projects progress—tightening control from project inception. • While the concept is promising, ALEI notes the effectiveness will depend on institutional independence rather than discretionary ministerial approvals. 6.3.4 Power Sector Reform & IPP Re-Negotiations Key Pledges: • Improve ECG’s collection efficiency, accelerate competitive measures, and rework Independent Power Producer (IPP) contracts. • A Technical Committee has submitted ECG reform proposals to Cabinet ahead of a September 2025 private-sector engagement plan. • The 2025 Budget signals budget support for tariff recalibration, fuel-to-gas swaps, and PPP participation. Implication: These initiatives are IMF-approved and essential to reduce inefficiencies and unsustainable quasi-fiscal drains. 6.3.5 VAT System Overhaul Planned Measures: • Address known VAT leakages (under-declaration of sales, inflated input claims, refund exploitation) through E-VAT digitization and tighter monitoring. • The 2025 Budget outlines IMF-backed VAT reforms, incorporating technical assistance, and linked to increased compliance metrics. Focus: ALEI urges that VAT reforms should tackle both system design and accountability—not just the digital platform. 6.3.6 Harnessing Windfall Gains & Targeted Incentives Key Moves: • Mining growth & rising gold prices offer an opportunity to introduce progressive windfall taxes, modeled on frameworks like Australia’s (applicable to profits exceeding thresholds). • Instead, Ghana raised the Growth and Sustainability Levy on mining by a flat increase from 1% to 3%—a blunt tool that could deter investment. Recommendation: A tiered windfall approach would better reconcile revenue goals with investment tracking. 6.3.7 Scaling Down SOEs: Reducing Fiscal Exposure Fiscal Context: • Combined arrears from COCOBOD and ECG neared GHS 100 billion at end-2024—posing severe budgetary risks. • Topique SOEs continue to burden the treasury with growing deficits and quasi-fiscal liabilities. Policy Leap: ALEI strongly supports privatization or operational handover of unviable SOEs, allowing the government to focus resources on high-yield services. 6.3.8 Rethinking Flagship Projects for Results • The 2025 Budget earmarks GHS 18.86 billion for seven mainstream flagship initiatives (e.g., Big Push, Women’s Development Bank, Adwumawura, Agriculture for Economic Transformation). • Yet, no cost-benefit or impact evaluations accompany these programmes. ALEI Position: Without clear measures of efficacy, these initiatives risk inflating deficits without delivering sustainable benefits. 6.3.9 Procurement Reform: Ensuring Value for Money Structural Concerns: • Roughly 90% of contracts are sole-sourced, leaving public procurement susceptible to waste and corruption. • While provisions exist to establish an independent Value-for-Money Office, its actual authority and independence remain undefined. Recommended Actions: 1. Embed value-for-money gates before contractual approvals. 2. Automate procurement under GHANEPS integrated with GIFMIS. 3. Grant IFC authority to veto suspect contracts — reducing political capture. ✅ ALEI Conclusions: Aligning Promises with Governance • Where legal reforms are enacted (PFM, VAT, power-sector), they reflect prudent IMF-aligned economics. • However, implementation lags (dialogue output, SOE restructuring, procurement automation) signal persistent governance gaps. • Without strengthening transparency, rule of law, and institutional autonomy, legal frameworks alone won’t deliver intended fiscal and economic stability. 🔜 ALEI Next Steps ALEI proposes producing a rule-of-law index for fiscal reforms, incorporating: • Timeliness of audit publication. • Independence of procurement institutions. • Measurable performance of SOE programs. Would you like ALEI to build this index and track monthly compliance alongside budget monitoring? Here is a visual comparison of Ghana’s key structural reforms and governance metrics—both scored out of 10 based on performance indicators. The chart highlights the disparity between reform intentions (like the Public Financial Management legal overhaul and VAT reforms) and the lagging governance mechanisms (such as procurement independence and transparency in flagship project spending), which are crucial for sustaining long-term economic discipline. 6.4 Strategic Investment in Flagship Initiatives: Fiscal Soundness or Risk? The 2025 Budget earmarked GHS 18.86 billion (~ 10 % of non-grant revenue) for seven major flagship programmes: 6.4.1 Institutional Strength: A Key to Keeping Surplus IMF data confirms a strong correlation between robust institutions and sustained primary surplus—an aim of Ghana's fiscal strategy. Structural weaknesses, however, could unravel these gains. GoldBod: A Case in Point • Budget injection of GHS 4.55 billion to purchase ~3 tonnes of gold weekly (~US$250 million/week) . • Risk: Weekly purchases far exceed the productivity of small-scale miners; foreign exchange liquidity may mask deeper liquidity mismatches. Governance Concerns • Gold trade historical laxities invite potential abuse and insider capture. • Absent a clear regulatory-commercial framework, GoldBod may replicate COCOBOD’s model—accumulating debt to fulfill obligations without returns. Legislative Protections Needed • Funds managed under the GoldBod Act must include transparency safeguards to prevent diversion to politically exposed players. • Without these, Ghana risks slipping from its targeted 1.5% surplus under new PFM rules. 6.4.2 The 24-Hour Economy: Aspirational but Operationally Hollow Promise & Status • Drafting amendments to the Labour Act, Ghana Investment Promotion Act, and related laws is underway to propel a 24-hour economy. A presidential special advisor is in place, but no bills have been laid before Parliament. ALEI Analysis • The initiative lacks a grounded strategy. Ghana’s own “One District–One Factory” programme faltered due to poor sectoral focus and execution metrics. • Industrial value chains—e.g., in pharmaceuticals—require targeted support in inputs, infrastructure, and workforce. Raw legal changes alone won’t guarantee continuous operations or investor confidence. 6.4.3 Tax Relief: Budgetary Consequences & Revenue Trade-Offs Repealed Taxes • The 2025 Budget eliminated the e-levy, emissions levy, betting tax, and COVID-19 levy . Fiscal Impact • Expected revenue shortfall: ~GHS 2.6 billion, primarily from e-levy (GHS 2.02 bn) and betting tax (≈GHS 0.25 bn) . • Offset via tighter tax refunds (ceiling cut from 6% to 4%), projected to release ~GHS 3.6 bn—covering the gap . ALEI Perspective • While politically popular, these repeals risk destabilising revenue streams, particularly if offset mechanisms (like reduced refunds) are not strictly enforced. • Moreover, the revoked data traceability from e-levy transactions weakens the GRA's capacity to identify high-value taxpayers. 6.4.4 Underpinning Macroeconomic Conditions A thriving flagship programme ecosystem requires competent foundational macroeconomic policies: • Currency: ~20–24% depreciation in past year. • Inflation: hovering around 21%. • Lending Rates: averaging 31%. • Power Tariff: ~US$0.12/kWh. • Imported Inputs: subject to inconsistent duty regimes. These indicators suggest Ghana remains uncompetitive for 24-hour manufacturing without deeper fiscal and economic reforms. 6.4.5 ALEI Insights 1. Scale wisely: Channel public funding into programmes offering measurable returns—neglecting this increases debt without adding value. 2. Build the GoldBod right: Anchor the institution in professionalism and accountability; avoid a debt accumulation trap. 3. Optimize the 24-hour economy: Prioritize select high-value sectors and create enabling environments—legal reforms alone won’t suffice. 4. Safeguard revenue gains: The abolition of taxes must be matched by enforced savings and alternative revenue channels. 5. Reform macroeconomics first: Stabilize currency, tame interest rates, rationalize power tariffs, and simplify duties before expanding flagship support. 6.4.6 Final Word ALEI warns that mega-budget programmes, however laudable, can backfire under weak governance and structural neglect. Ghana's path to achieving surplus and sustainable growth requires prioritizing institutional capability, economic stability, and transparent stewardship before scaling grand initiatives. 6.5 Revenue Impacts from Tax Removal & Levy Adjustments ALEI examines the fiscal effects of repealing the e levy and betting tax, assessing their implications for revenue targets and economic behavior. 6.5.1 Mobile Money Transactions: Gains vs. Losses • GSMA estimates Ghana lost GHS 1.4 billion annually due to declining mobile money activity following the 1.5% e levy—partly because transaction frequencies dropped by over 20% and cash withdrawals surged . • Anticipated bounce in mobile transfers post-abolition is expected to recoup these losses and support digital financial inclusion. 6.5.2 Betting Tax Removal: A Growth Opportunity? • With gross gaming revenues at GHS 206.4 million (2024), and annual growth of 120%, ALEI projects revenues could have climbed to roughly GHS 450 million if the betting tax remained in place . • Betting taxes form a small portion—about 1% of total revenue—but were generating significant gains for GRA. Overall Fiscal Picture: Together, the e levy and betting tax removals affect less than 1% of total revenue. Yet, they require compensatory measures to stay on track with IMF-mandated revenue goals. 6.6 Explaining Poor Outcomes: Lessons from 2017 • In 2017, the government eliminated nine minor taxes and revised seven others—without evidence of lasting revenue growth or improved compliance. • ALEI concludes: tax cuts alone are insufficient; they must accompany structural reforms that broaden the taxpayer base and reinforce enforcement systems. 6.7 Industrial & Agricultural Relief: Unmet Promise • The 120-day Compact pledged to review import taxes and levies on equipment for industrial and agricultural use within 90 days—this remains unfulfilled. • The 2025 Budget acknowledges tariff review intentions but offers no concrete timelines or action steps. Structural Bottlenecks: 1. Layered levies (e.g., VAT, GETFund, NHIL, etc.) artificially inflate effective tax to over 20%, impeding capital investment. 2. Most levies are non-recoverable, reducing incentives to import critical machinery. 3. Weak implementation of the Tax Exemptions Act has allowed misuse—e.g., a hotel claiming agricultural status under One District-One Factory programmes . 4. Other hidden fees—Special Import Duty, Energy Debt Recovery, ECOWAS levy, EXIM levy—push effective import costs even higher. 6.8 Structural Analysis & ALEI Recommendations 1. Reclaim Mobile Money Revenues • Monitor growth in transaction volumes and related indirect tax contributions (like VAT and withholding taxes). • Consider digital voucher systems to recover data and revenue lost with the e levy’s repeal. 2. Optimize Gaming Sector Taxation • Reassess GGR tax structure—consider combining withholding on winnings with an excise on stakes, following Kenya’s dual model, to enhance stability . 3. Operationalize Equipment Tax Relief • Transparently separate levies from VAT; reform non-refundable levies to reduce cost burdens. • Target relief to machinery that directly improves productivity, using a clear, sector-based exemption framework. 4. Close Loopholes in Exemptions • Audit passes under One District-One Factory to prevent misuse. • Tie future VAT exemptions to performance benchmarks (e.g., job creation, export growth). 5. Simplify Import Regime • Consolidate multiple import levies into a single, transparent fee. • Aim for a total import tariff and levy burden under 15%, boosting competitiveness. 6. Boost GRA Capacity • Strengthen audit tools, including access rights and digital tracking (as per VAT amendment Act 1087) . 6.9 ALEI Impact Summary Final Word ALEI finds that while these tax policy changes are important, they must be embedded within broader structural reforms: database accuracy, digital compliance tools, fair levy systems, and GRA enforcement improvements. Only a holistic approach can ensure revenue resilience, economic competitiveness, and efficient investment. 6.6 Understanding the Impact of Levy Reforms on Revenue 6.6.1 Abolition of the E-Levy: Economic Gains vs Revenue Loss • According to the GSMA, the 1.5% e-Levy led to a 25% decline in mobile money usage, contributing to an estimated GHS 1.4 billion net loss in revenue annually due to reduced transaction volume and GDP impact . • Following its repeal, mobile money transaction volumes soared, reaching a record GHS 365 billion in April 2025—a testament to pent-up demand and renewed confidence . 6.6.2 Betting Tax Removal: Modest Yet Noticeable • Gross gaming receipts reached GHS 206.4 million in 2024, escalating by 120%. Without the betting tax, this growth might have pushed revenue to an estimated GHS 450 million . • While constituting under 1% of national revenue, the loss highlights the value of targeted digital consumption taxes. 6.7 Long-Term Revenue Strategies: Beyond Short-Term Cuts 6.7.1 Lessons from 2017 • In the 2017 fiscal cycle, Ghana eliminated nine taxes and adjusted seven others. However, overall revenue didn’t rise—a failure ALEI attributes to weak governance reforms and compliance mechanisms. 6.7.2 Strategic Governance Actions Needed ALEI underscores that abolishing levies must be matched with measures that grow the overall tax base: 1. Strengthen GRA digital infrastructure—use insights from e-wallet systems to improve auditing and taxpayer traceability. 2. Simplify tax structures—eliminate overlapping charges, shift towards flat fees where possible, and incorporate exemptions only for high-impact, productive investments. 3. Empower informal businesses—ease entry barriers while gradually scaling VAT/PIT coverage using digitized platforms. 6.8 Reviewing the Unfulfilled Promise: Equipment Import Tax Reforms • The 120-day Pact pledged a 90-day review of taxes on imported industrial and agricultural equipment, but no outcomes are yet evident. • The 2025 Budget mentions port duty assessments, but no legislation has been presented. 6.8.1 Hidden Costs and Compliance Disincentives 1. Compound charges (VAT + GETFund + NHIL, etc.) push effective import duty rates to over 20%, discouraging modernization and formalisation. 2. Non-refundable levies disincentivize capital imports—particularly machinery vital for agricultural and industrial growth. 3. Exemptions are misapplied, for example under One District–One Factory, benefiting non-priority sectors . 4. Uncoordinated charges like Special Import Duty, Energy Debt Levy, ECOWAS and EXIM levies inflate costs without generating proportional value. 6.8.2 Structural and Policy Reforms ALEI Recommends • Decoupling levies from VAT and ensuring refundability for capital purchases. • Streamlining import charges, targeting a maximum of 15% overall burden, with simplified unified tariffs. • Establishing sector-specific relief mechanisms tied to performance and export potential. • Enforcing transparency and oversight in granting exemptions, with clear eligibility criteria and regular auditing. 6.9 ALEI’s Summary Table 6.10 Final Verdict ALEI contends that while removing unpopular levies advances financial inclusion, without deeper governance and structural reforms, Ghana risks suffering revenue setbacks and weakening its industrial capacity. A well-coordinated package of legal transparency, VAT reconciliation, import cost reform, and GRA modernization offers a more robust path toward sustainable revenue and economic transformation. 6.11 Simulating the Impact of Equipment Tax Reforms on Ghana’s Economy The African Liberators Economic Institute (ALEI) believes that the successful implementation of equipment tax reforms could significantly improve Ghana’s industrial productivity, formal sector expansion, and domestic revenue performance. Below is a simulation of the possible effects, based on available data trends, expert economic modeling, and lessons from peer countries. 1. Machinery Import Growth Projection If the government enacts a clear policy to remove non-refundable VAT, streamline levies to a maximum 15% total burden, and enforce transparent exemption procedures, Ghana could experience a surge in capital equipment imports. 11. Historical data from the Ghana Statistical Service shows that between 2018 and 2022, machinery imports fluctuated due to inconsistent port charges and a lack of clarity around exemptions. 12. ALEI projects that with these reforms in place, capital machinery imports could grow by 35% to 50% annually over the next three years, especially in the agro-processing, manufacturing, and construction sectors. 13. This translates to an estimated USD 500 million to USD 800 million in additional machinery inflows by the end of 2027. 2. Industrial Productivity and Output Gains Increased access to affordable machinery will directly boost production output, reduce downtime, and enhance efficiency in key industrial segments. • Based on conservative modeling, a 40% rise in capital machinery usage can increase industrial sector output by at least 15% to 20% within two years. • This could add an additional GHS 8 billion to GHS 12 billion to Ghana’s GDP annually, particularly in value-added industries like textiles, food processing, construction materials, and light manufacturing. 3. Expansion of the Formal Sector and Job Creation With lower barriers to mechanization, many informal businesses are likely to formalize to benefit from duty exemptions and VAT refunds. • ALEI estimates that the reforms could bring over 150,000 micro and small enterprises into the formal economy within 24 months. • This would not only enhance Ghana Revenue Authority (GRA) tax coverage but also improve compliance with labor laws and social security contributions. • The new investments in equipment and productivity would support the creation of up to 400,000 new direct and indirect jobs, especially for youth and semi-skilled workers. 4. Medium-Term Revenue Recovery Although the immediate removal or refund of VAT on equipment may appear as a revenue loss, ALEI’s modeling shows the long-term recovery can be substantial. • The increased formalization of businesses and the rise in domestic industrial output would expand the VAT and corporate tax bases. • ALEI projects that by the third year of implementation, Ghana could recoup and even surpass the initial foregone revenue, with an estimated GHS 3 billion in additional tax revenue per year by 2028. • Moreover, increased productivity will also lead to more exports, boosting foreign exchange reserves and reducing trade deficits. 5. Fiscal Stability and Investor Confidence Streamlining and legislating tax reform around equipment imports signals long-term policy consistency to both domestic and foreign investors. • This would raise Ghana’s competitiveness on the West African industrial map, attract more FDI, and reduce reliance on consumption-based taxes like VAT and excise. • ALEI anticipates that, with consistent implementation, the reforms could contribute to 0.5% to 1% annual GDP growth acceleration, helping Ghana meet its medium-term growth targets without excessive borrowing. 6.12 Summary of ALEI’s Position The African Liberators Economic Institute strongly recommends that the government: • Fully legislate and enforce equipment tax reforms promised under the 120-day Pact. • Cap the effective tax rate on capital imports at no more than 15%, including all levies. • Make VAT on machinery refundable or fully exempt for registered enterprises. • Tie exemptions to performance and sector priorities, especially agriculture, processing, energy, and manufacturing. • Digitize exemption processes and duty payments to reduce corruption and abuse. By taking these steps, Ghana can unlock a wave of industrial investment, improve productivity across sectors, and sustainably grow its revenue base without harming consumers or businesses.