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Ghana’s government has approved plans to implement a 10% tax on earnings from lotteries, games of chance winnings, and sports betting at the point of payout.

Betting companies operating in the country will also be subjected to a 20% tax on their revenue.

These measures are part of the government’s efforts to increase domestic tax revenue, which is crucial to help secure a $3bn bail-out programme by the International Monetary Fund (IMF).

Ghana, once described as Africa’s shining star, has been hit by a severe economic crisis.

Despite having the world’s fastest-growing economy in 2019, and being a major cocoa and gold exporter, Ghana is currently battling its worst financial crisis in decades, with inflation hovering at a record 50.3%, the highest in 21 years.

Wrong decisions

While President Nana Akufo-Addo (pictured), who took power in 2017, blamed the situation on external shocks, including the pandemic and Russia-Ukraine war, analysts say the government took certain political and economic decisions that would have eventually exposed the weaknesses in the system even without those external factors.

For instance, to fulfil one of Akufo-Addo’s most expensive campaign pledges, his government launched a free education programme in public high schools and provided free meals to students at primary and secondary levels.

In addition, the governing New Patriotic Party scrapped a number of taxes and import duties, which led to a reduction in government revenue.

The government resorted to borrowing to make up for the revenue shortfall, leading to high debt-to-GDP exposure and unsustainable debt levels.

Mixed reactions

The government’s decision to implement the new taxes on betting and lottery winnings has been met with mixed reactions.

Some stakeholders argue that it is a step in the right direction, while others believe it will only push punters to unlicensed sports betting providers.

Sports betting was legalised in Ghana in 2006, with 35 companies holding a sports betting licence from the Gaming Commission in 2022.

Major online gambling operators saw the African market as “an opportunity too big to ignore” last year.

However, in contrast to other markets such as Europe and America, where governments and regulators are actively implementing measures to combat problem gambling and ensure responsible gambling practices, the issue of problem gambling awareness is largely overlooked in Africa.

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