IEA warns GSL cut could undermine gains from natural resources

The Institute of Economic Affairs (IEA) has cautioned that government’s decision to reduce the Growth and Sustainability Levy (GSL) from three per cent to one per cent could undermine efforts to maximise returns from Ghana’s natural resources.

At a press briefing in Accra on Wednesday, the policy think tank said the move—intended to ease the burden on investors—runs counter to a growing global shift toward greater national ownership and increased benefits from extractive industries.

Justice Sophia Akuffo, a Distinguished Fellow of the IEA, questioned the policy direction, noting that it appears inconsistent with government’s earlier push to increase royalties in order to capture more value from the country’s mineral wealth.

She warned that lowering the levy weakens Ghana’s broader objective of securing maximum gains from its extractive sector, and called for more coherent and predictable fiscal policies aligned with long-term national interests.

The former Chief Justice also expressed concern about Ghana’s repeated reliance on the International Monetary Fund (IMF), despite the country’s vast natural resource base, estimated to be worth trillions of dollars. She further cited government’s recent borrowing of GH¢17 billion to pay salaries as an indication of underlying fiscal challenges.

Justice Akuffo urged authorities to better leverage the country’s natural and mineral resources to drive sustainable economic development.

Drawing comparisons with countries such as Botswana, Burkina Faso, Chile and Venezuela, she noted that many resource-rich nations are adopting models that emphasise stronger state participation and improved returns for citizens.

“These examples show that asserting sovereignty over natural resources does not deter investment but rather reshapes agreements to favour national development,” she said, adding that Ghana must adopt similar approaches.

She also highlighted the opportunity presented by the imminent expiration of over 30 mining leases, rising global mineral prices and the discovery of new critical minerals, describing it as a critical moment for Ghana to reset its resource governance framework.

Justice Akuffo proposed that future engagements with private sector players—both local and international—should be structured through service contracts that preserve national control while maximising benefits for Ghana’s industrial transformation.