No. 2: Economic Policy Priorities for the New Government
January 19, 2017
The Ghanaian Economy in 2012 – How Accurate was the Reported Fiscal Deficit? [Occasional Paper 08]
January 19, 2017

Revenue Earmarking in Ghana: Management and Performance Issues [Occasional Paper 07]

Occasional Paper 7. Revenue Earmarking in Ghana: Management and Performance Issues

Although revenue earmarking was seldom used in Ghana before the Fourth Republic, it has now become a common fiscal practice. Specifically, while only two formal earmarking arrangements existed in the country before the Fourth Republic, there are currently 11 arrangements of revenue earmarking with one more in the pipeline.  Because earmarking currently consumes a large chunk of the country’s fiscal resources, with about 35% of total revenue and grants earmarked in 2013, ensuring effective management of the various earmarked funds is an important component of the country’s quest for effective fiscal management. This paper examines how effectively the various earmarked funds have been managed and how they have performed. The paper finds that the earmarked funds in Ghana face entrenched management challenges, which, with the exception of a handful, have led to poor performance of the funds. The usefulness of revenue earmarking in Ghana is therefore undermined. In addition to recommending against the establishment of new earmarked funds in Ghana unless they are found to be essential, the paper provides a number of recommendations as to how best the management challenges can be addressed in order to improve the performance of the existing earmarked funds to justify their continuous existence.

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