African regulators, including those in Ghana, have increasingly prioritized revenue generation over fostering a conducive business environment.
This obsession with revenue has led to a myriad of challenges, including excessive taxation, bureaucratic hurdles, and regulatory uncertainty.
While governments may see short-term gains, these policies often stifle innovation, discourage investment, and ultimately harm economic growth. Ghana, in particular, has experienced the negative consequences of this approach, as businesses struggle to navigate a complex regulatory landscape.
Bright Simons, Honorary Vice President of IMANI Centre for Policy and Education, in compelling analysis, underscored a striking commentary on a reality that seems to plague regulatory bodies across Africa: a revenue-focused agenda that sidelines the very principles these organizations are meant to uphold.
His insights unveiled a dilemma for foreign investors and African economies alike—a regulatory culture that equates efficiency with the collection of fees rather than the provision of enabling services or customer satisfaction.
“The one thing top African regulators seem optimised for is charging all manner of fees and doing a very effective job at it. Now, don’t get me wrong, most regulators worldwide probably love fees, and there are some elsewhere, certainly in the US, like those folks at the SEC, that seem to revel in slapping folks with fines to see how fast money can drip from stretched pores into their nice, dangling, pots.
“But there is something grating about a regulator that normally won’t respond to emails if you want a clarification about something urgent yet would suddenly become efficiency itself when it is time to bill you for one renewal charge or the other.”
Bright Simons, Honorary Vice President of IMANI Centre for Policy and Education
This emphasis on immediate revenue generation, Bright Simons opined stifles long-term benefits like stability, trust, and market efficiency, creating an atmosphere where compliance becomes a cumbersome process rather than a supportive structure.
Ghana Revenue Authority, a Classic Revenue Regulator
Bright Simons highlighted the Ghana Revenue Authority (GRA) as a case in point, noting its recent review of its strategic plan.
The plan unsurprisingly centers on maximizing tax revenue, a priority that aligns with governmental expectations but overlooks the importance of sustainable tax collection practices.
The GRA’s execution of this strategy, according to Bright Simons, sees over 60% of actions focused on revenue collection, with little emphasis on essential performance targets such as customer service improvements that would make tax compliance a smoother experience for businesses and individuals.
He emphasized that without these customer-centred enhancements, the GRA’s objective to increase Ghana’s tax-to-GDP ratio from 13% to 18% might remain an unattainable dream.
The relentless pursuit of revenue, in Bright Simons’ view, risks alienating taxpayers rather than encouraging compliance, placing the agency at odds with its long-term ambitions.
“What do we see when we review the agency’s execution of its strategy so far? More than 60% of actions, over 40% of KPIs, and 80% plus of completed projects are about revenue maximisation. In fact, a grand zero of key undertakings to enhance taxpayer satisfaction have been completed.
“Like I said, revenue is great, but a regulator that obsesses only over revenue (even if it is a tax authority whose bread and butter is indeed tax revenue) would soon find that those meant to pay have drifted off. And that moving tax to GDP ratio from 13% to 18% remains out of reach”.
Bright Simons, Honorary Vice President of IMANI Centre for Policy and Education
Petroleum Commission’s Declining Growth Vs. Increasing Workforce
The situation is similarly dire in Ghana’s oil sector, where according to the IMANI’s Honorary Vice President, Ghana’s Petroleum Commission has rapidly expanded, growing its workforce from 86 to 350 personnel, even as the oil industry has seen diminishing production.
Bright Simons contended that the Commission’s justification—mirroring the hiring and compensation practices of the Ghana National Petroleum Corporation (GNPC)—reveals a deeper issue.
“I’m sure Petroleum Commission folks would say that they are learning from the state-owned oil company, GNPC, where personnel has almost tripled over a similar period and average salary per year top $42k in a country where average annual salaries hover around $2k.
“The Petroleum Commission would love to argue that it is merely following ‘industry trends’. Except that GNPC began life as a regulator and has just internalised that life”.
Bright Simons, Honorary Vice President of IMANI Centre for Policy and Education
He decried emblematic nature of regulatory bodies’ detachment from their foundational goals, channeling resources toward salaries, SUVs, plush offices, and lavish travel perks while local communities and the broader public benefit little from its existence.
For regulators like the GNPC, revenue streams from fees and taxes have evolved into the primary measure of effectiveness.
Bright Simons pointed out that GNPC’s average monthly salary of 60,000 Ghana Cedis starkly contrasts with the national public sector average of 2,594 Ghana Cedis.
Worse still, GNPC’s expenditures, including scholarships and CSR funds, according to Bright Simons, rarely reach the communities or individuals without political influence, further entrenching a system that caters to the elite while sidelining genuine developmental concerns.
Bright Simons’ commentary on the regulatory obsession with fees serves as both a cautionary tale and a call for reform. As he eloquently argued, a narrow revenue-focused approach may yield immediate financial gains but ultimately fosters a disillusioned tax base, stagnant investment climate, and deteriorating public trust in regulatory institutions.
For African countries like Ghana, eyeing long-term development, a shift from revenue-first thinking to a balanced strategy that incorporates customer service, market growth, and inclusive development could mark the difference between fleeting revenues and enduring prosperity.
There is high need to prioritize short-term revenue gains or embrace a broader, sustainability-driven approach that fosters investor confidence, taxpayer engagement, and, ultimately, economic resilience.
READ ALSO: Antoine Mensah Refutes GMX Streaming Platforms’ ‘First’ Tag
