BrazilMcKinsey helps Ghana Revenue Authority achieve double digit growth rates
Following the appointment of global management consultancy McKinsey & Company to support with tightening its revenue collection process, the Ghana Revenue Authority has expressed its satisfaction with the firm’s work so far, particularly in light of stabilised revenues.
Financial reports at the Ghana Revenue Authority (GRA) last year revealed a deficit of nearly $370 million between expected levels of revenue in the country and the actual revenue collected. The low levels of revenue sparked concern about stability in the country, prompting the International Monetary Fund to suggest a tax hike in the country.
The government subsequently introduced a proportional taxation framework, with the objective of covering the gap by nearly $300 million. The measures failed to cover the deficit, which is particularly detrimental to the country, given that it is engaged in an IMF bailout programme of $1 billion that expires this year.
The GRA examined the possible internal shortcomings that might be contributing to the problem, attributing the issue to the customs collection department and the lack of transparency therein. To help rectify the issues, the GRA enlisted the services of management consultancy McKinsey & Company.
Now, the GRI has publicly declared its satisfaction with the work conducted by McKinsey so far, particularly as revenue levels returned to an upwardly trajectory towards the end of last year. Revenue levels grew by 5.3% in October last year, 16.3% in November and more than 18% by the end of the year.
Commenting on the performance, Commissioner-General of the GRA said, “The last quarter of the year we did well because they were offering good advice and helping us with the kind of work that we were doing; especially for the Customs area, the collections up to the end of the quarter weren’t that good.”
“We have the belief that ending 2019, things should be far better than we experienced in 2018,” he added. At the current rate of growth, the GRA expects revenue levels to reach Cedi 45 billion by the end of 2019, which is substantially higher than the Cedi 38 billion revised target for the end of last year.
