Peprah Urges Caution on Fuel Tax Cuts, Proposes Moderate Relief to Safeguard Revenue

A Professor of Finance at Andrews University, Williams Kwasi Peprah, has cautioned the government against fully implementing the GH¢1.65 reduction in petroleum prices being advocated by a coalition of civil society organisations (CSOs), describing the proposal as excessive and potentially harmful to the national budget.

Speaking on The Pulse on JoyNews on Tuesday, April 14, 2026, Professor Peprah acknowledged the need for consumer relief but warned that the proposed 40 percent cut in the total tax component—championed by groups including IMANI Africa, COPEC, INSTEPR and Institute for Energy Security—could significantly undermine government revenue and disrupt key development projects.

Instead, he proposed a more measured approach, recommending a 20 percent reduction as a “fair compromise” that balances fiscal sustainability with public relief.

According to him, a 40 percent reduction would result in an estimated monthly revenue loss of about GH¢600 million, while a 20 percent cut would reduce the impact to roughly GH¢300 million.

To offset this projected shortfall, Professor Peprah advised the government to adopt a “fiscal switch” strategy, which would involve deferring selected expenditures.

“Government must absorb certain line items within its expenditure framework. Goods and services, as well as some capital projects, could be postponed to 2027 to prevent disruption to budget targets,” he explained.

He also criticised the government’s proposal for a short-term, four-week intervention, arguing that it would be insufficient given ongoing global uncertainties.

Citing the lingering effects of geopolitical conflicts and forecasts from the World Bank, he stressed the need for a longer intervention period of at least six months to allow businesses and households to plan effectively.

“A four-week window is too short for meaningful planning. Even minor global conflicts tend to have economic effects lasting beyond six months. A longer-term strategy is necessary for investors, companies and individuals,” he said.

With Ghana still operating under an economic programme with the International Monetary Fund set to end in August, Professor Peprah warned that any policy misstep could jeopardise the country’s ability to meet key fiscal targets.

He recommended that any tax adjustments be formalised through a mid-year budget review, enabling government to transparently outline expenditure cuts that would compensate for lost revenue.

The finance expert also cautioned against permanently scrapping taxes at this stage, noting that future fiscal pressures—particularly potential wage demands from labour unions driven by inflation—would require sustained revenue streams.

Commenting on President John Mahama’s indication that Ghana could source fuel from Nigeria’s Dangote Refinery, Professor Peprah described the move as positive for supply security.

He noted that while global crude oil prices would still apply, Ghana could benefit from reduced freight costs due to proximity. He added that further gains could be realised if transactions fall under the ECOWAS Trade Liberalisation Scheme, which offers potential tax advantages.

Professor Peprah concluded that while inaction would be the worst possible outcome, any intervention must be carefully targeted and supported by a transparent realignment of the 2026 budget.