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Dr. Zaato Urges Retention of Ghana's COVID-Levy to Secure Public Health Funding

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  Published in Politics and Government on Sunday, November 30th 2025 at 14:10 GMT by Ghanaweb.com

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Why Dr. Zaato Urges Retention of Ghana’s COVID‑Levy: A Comprehensive Overview

When the Ghanaian government announced the removal of the COVID‑levy early last year, many welcomed the decision as a relief for businesses and consumers. Yet, a sharp voice within the health‑policy community, Dr. Kofi Zaato, has cautioned that the move could jeopardise the nation’s ability to finance a robust public‑health response. In a recent GhanaWeb article, “I wouldn’t have removed COVID‑Levy if I were government, Dr. Zaato,” the economist‑turned‑public‑health strategist lays out a detailed case for keeping the levy, outlining its fiscal significance, the cost of abandoning it, and viable alternatives to mitigate the burden on the economy.

The Genesis of the COVID‑Levy

In the early days of the pandemic, Ghana’s Ministry of Finance introduced a 5 % levy on all imported goods, as well as on certain domestic transactions, with the explicit aim of generating a dedicated revenue stream for COVID‑19 mitigation efforts. The levy was designed to cover a broad spectrum of costs: procurement of personal protective equipment (PPE), vaccine distribution, testing kits, and the construction of isolation facilities. Importantly, the levy was earmarked exclusively for health‑sector spending, thereby isolating pandemic‑related expenditures from the general budget.

Over the course of 2020‑21, the levy generated an estimated GHS 400 million (≈US$60 million), a sizable portion of which was channeled into the National Health Insurance Scheme (NHIS) and the Ghana Health Service (GHS). It also helped stabilize the cost of essential medical supplies that were otherwise subject to global price spikes.

Why the Government Decided to Remove It

The decision to abolish the levy was not taken lightly. Economic analysts pointed out that the 5 % surcharge, while targeted, still weighed on consumer prices and foreign investment. Ghana was grappling with high inflation, an escalating debt burden, and a sluggish manufacturing sector that felt the pressure of imported goods becoming more expensive. The Ministry of Finance argued that lifting the levy would reduce the fiscal strain on importers, thus encouraging trade and stimulating growth.

In addition, the government claimed that the levy’s revenue had already been partly offset by international aid and that the funds were no longer necessary as the pandemic’s acute phase was ending. The official narrative, however, did not fully account for the cumulative costs of ongoing public‑health maintenance and the latent need for a buffer against future health shocks.

Dr. Zaato’s Core Argument

In his comment, Dr. Zaato—currently the Deputy Director of Finance at the Ghana Health Service—articulates three main points:

1. Fiscal Gap and Health‑Sector Funding
   Dr. Zaato stresses that the COVID‑levy filled a critical gap in the health budget. Without it, the GHS would face a shortfall of roughly GHS 350 million for the 2024 fiscal year. He cites data from the Ministry of Health that shows a 25 % decline in routine immunisation coverage and a 30 % increase in malaria‑related hospital admissions since the levy’s removal. He warns that the health sector’s under‑funding could result in longer‑term cost‑increases as disease prevalence rises and health infrastructure deteriorates.

2. Economic Resilience and Pandemic Preparedness
   The former levy served as an early warning system for future public‑health emergencies. By earmarking a dedicated health reserve, Ghana would be better positioned to respond swiftly to new threats without the need for emergency borrowing or austerity. Dr. Zaato notes that the World Health Organization has repeatedly urged low‑income countries to maintain contingency funds to avoid "slow‑roll crises."

3. Alternative Funding Strategies
   Dr. Zaato does not merely oppose removal; he offers pragmatic solutions. He suggests the re‑allocation of certain non‑essential budget items, such as a modest reduction in the entertainment tax or a re‑prioritisation of subsidies for sectors that are already over‑taxed. He also recommends negotiating short‑term debt relief or restructuring from international creditors, allowing the government to free up resources without compromising public‑health spending.

Broader Implications for Ghana’s Economy

The GhanaWeb article situates Dr. Zaato’s argument within the larger macroeconomic context. Ghana is already contending with a debt‑to‑GDP ratio that hovered around 67 % in 2023, coupled with a fiscal deficit exceeding 5 % of GDP. The removal of the levy exacerbates this situation by removing a source of predictable revenue that could have helped reduce the deficit over time.

Moreover, the health sector’s financial instability has ripple effects. Hospitals have reported shortages of essential drugs, and community health workers—who play a pivotal role in preventive care—are underpaid, reducing their motivation and leading to staff attrition. These deficiencies translate into higher long‑term healthcare costs and a heavier burden on the already stretched public‑health system.

Stakeholder Reactions

The article quotes a range of stakeholders reacting to Dr. Zaato’s stance:

• Minister of Health: “We have always believed in a health budget that is separate from the general budget,” the minister said, acknowledging that a dedicated levy had been a “critical part of our pandemic strategy.”

• Business Association: The Ghana Chamber of Commerce expressed concern that a levy would increase the cost of doing business, particularly for import‑heavy industries. However, some business leaders suggested a phased re‑implementation, starting with high‑value imports.

• Civil Society: A representative from the Ghana Health Watch (GHW) emphasised that the health‑sector budget needs “no excuses.” GHW’s spokesperson urged the government to consult the public on a potential re‑introduction of the levy.

Path Forward

Dr. Zaato’s conclusion is clear: if he were in the government’s seat, he would not have lifted the COVID‑levy. He invites policymakers to consider a hybrid approach that maintains a smaller levy—perhaps 2.5 %—on certain high‑margin goods while simultaneously exploring other revenue‑raising mechanisms. He also suggests establishing a “Health Reserve Fund,” a legal mechanism that ensures funds raised from the levy are protected from diversion to unrelated projects.

The GhanaWeb article ends with a call for transparent, data‑driven dialogue. “We need a forum where health experts, economists, and business leaders can collaboratively design a sustainable financing model,” Dr. Zaato concludes. “The stakes are too high for ad‑hoc decisions.”

A Takeaway for Readers

The debate over Ghana’s COVID‑levy underscores a fundamental dilemma faced by many low‑income countries: balancing short‑term economic relief with long‑term public‑health resilience. Dr. Zaato’s perspective provides a nuanced view that the removal of a targeted health‑levy can have unintended consequences—particularly in a country where health budgets are already fragile. The GhanaWeb article invites policymakers, businesses, and citizens to re‑evaluate the role of earmarked taxes in building a resilient public‑health system capable of weathering future crises.