Bawumia backs insurance brokers' push for VAT relief and sector reforms

Former Vice President Dr Mahamudu Bawumia has engaged Ghana's insurance brokers on a comprehensive package of policy reforms aimed at revitalising the sector and boosting its economic contribution. The meeting with the Insurance Brokers Association of Ghana (IBAG) centred on practical measures to tackle mounting industry challenges and unlock growth in a sector that remains underdeveloped relative to Ghana's economic potential.

The discussion brought into sharp focus several structural constraints that have limited the sector's expansion. IBAG leadership, led by President Stephen Kwarteng Yeboah, pressed for immediate action on what the association views as an excessive Value Added Tax burden on insurance services—a friction point that has long hampered consumer uptake and market penetration.

Key Policy Proposals on the Table

The brokers tabled several concrete proposals designed to strengthen industry competitiveness and broaden insurance coverage. A primary request was exempting micro-insurance products from VAT altogether, a move intended to make basic insurance accessible to lower-income Ghanaians and informal sector workers who currently fall outside formal protection schemes.

Beyond taxation, IBAG pushed back against what it characterised as regulatory overreach. The association advocated for consolidation of oversight functions into a single regulatory body, arguing that fragmented supervision creates compliance inefficiencies and stifles innovation. This reflects longstanding frustration among market players about navigating multiple regulatory requirements.

Agricultural insurance emerged as another priority. IBAG called for stronger government support to develop customised crop and livestock insurance products, recognising that farmers face substantial uninsured risks from weather, pests, and market volatility. Improved agricultural insurance could anchor rural livelihoods and support the government's food security objectives.

The brokers also advocated mandatory use of local insurance brokers in transactions, alongside compulsory Group Life and Workmen's Compensation insurance schemes for employers. A final proposal—decennial liability insurance for road construction—would require contractors to carry long-term coverage against structural defects, offering protection to users and the state.

Why It Matters for Ghana

Ghana's insurance sector, whilst growing, remains shallow by regional and global standards. Insurance penetration—the ratio of premiums to GDP—lags far behind comparable African economies, signalling untapped demand and potential. A well-developed insurance market creates stability, encourages investment, mobilises domestic savings, and distributes risk more efficiently across the economy.

The tax relief proposals could meaningfully expand coverage among Ghanaians priced out of formal insurance. Agricultural insurance reform holds particular weight in a country where farming employs millions and climate variability poses rising threats to food production and rural incomes. Regulatory streamlining could reduce compliance costs and accelerate product innovation, making insurance more relevant to local needs.

Bawumia's engagement signals that sector development remains a policy priority across political actors. He committed to continued dialogue with IBAG and other stakeholders on translating these proposals into actionable reforms. Success will depend on alignment among the government, regulators, and the private sector—and on whether VAT relief and regulatory changes can be pursued without compromising consumer protection or fiscal commitments.