Enhancing Environmental Fiscal Strategies in Africa: The Case of Ghana and South Africa

Virgil Nbellah Abedana¹, Roshelle Ramfol^2* and Abdallah Ali-Nakyea³  

^{1, 2} University of South Africa, South Africa

¹ Email: 66441439@mylife.unisa.ac.za

² Email: ramfor@unisa.ac.za

³ University of Ghana, Ghana

Email: aali-nakyea@ug.edu.gh

*Corresponding e-mail: ramfor@unisa.ac.za

Abstract

Objective: This paper examines environmental fiscal strategies for enhancing public benefits in Ghana and South Africa. Methodology: Utilizing secondary data and drawing on theoretical frameworks such as institutional economics and public choice theory, the study analyses the status and challenges of implementing environmental tax policies in both countries. Findings: The results indicate that while Ghana and South Africa have adopted various fiscal strategies to address environmental challenges, they face significant hurdles in terms of administrative capacity, political acceptability, and maximizing public benefits. In Ghana, weak institutional frameworks and limited resources hinder effective tax administration, while in South Africa, challenges include accurately assessing environmental externalities and high compliance costs. Contribution: Insights into strategies for maximizing the public benefits of environmental taxes, including earmarking revenues for specific environmental projects, integrating tax policies with broader sustainability objectives, and fostering partnerships between the public and private sectors. This study contributes to the literature on environmental taxation and offers valuable insights for policymakers, researchers, and practitioners aiming to address environmental issues globally. Recommendations: Recommendations for policymakers include transparency and accountability in revenue management processes, strengthening institutional capacity, improving stakeholder engagement, enhancing voluntary compliance, ensuring policy coherence, and promoting digital innovation in environmental taxes.

Keywords: energy transition, fiscal strategies, environmental taxes, institutional economics, and public choice theories

DOI: https://doi.org/10.59857/PNUS7551