Ghana’s economic rebound: The thorny path that lies ahead

Akufo-Addo, Ghana’s elected president for the second term has signaled optimism for his country’s economy. But with the resurgence of COVID-19 across the world, what lies in store for Ghana is far from encouraging.

The President needs to curb government spending which has pushed the debt-to-GDP ratio to a high level. This drawback has caught the attention of the International Monetary Fund which has already issued warnings.

The President is expected to usher in job creation, infrastructure development, promote free basic education, and moot private sector development. This may slow down in the wake of the second wave of COVID-19 pandemic despite the president’s promise of a $17 billion development programme for Ghana.

Akufo-Addo has envisioned a “Ghana beyond Aid” status for his country, however on account of the country’s GDP growth slide in 2020, the finance ministry will be compelled to seek external support. Gold, oil, and cocoa together account for over 80% of Ghana’s export earnings.

While gold may cushion the bitter economic impact of the pandemic as a hedge against mounting inflationary pressures across the globe, a country cannot afford to consider a single commodity as a winning horse. Petroleum earnings can decline and there is an expected fall in chocolate consumption especially in Europe and North America where incomes have been hit.

Further, there is obviously an increasing trend especially in developing nations to curtail expenditures on imports. While even developed countries are reeling under economic pressure owing to an unprecedented second lockdown, Ghana with its ambitious plans for economic growth will have to encounter tough challenges during the days that lie ahead.

Akufo-Addo, Ghana’s elected president for the second term has signaled optimism for his country’s economy. But with the resurgence of COVID-19 across the world, what lies in store for Ghana is far from encouraging.

The President needs to curb government spending which has pushed the debt-to-GDP ratio to a high level. This drawback has caught the attention of the International Monetary Fund which has already issued warnings. The President is expected to usher in job creation, infrastructure development, promote free basic education, and moot private sector development. This may slow down in the wake of the second wave of COVID-19 pandemic despite the president’s promise of a $17 billion development programme for Ghana.

Akufo-Addo has envisioned a “Ghana beyond Aid” status for his country, however on account of the country’s GDP growth slide in 2020, the finance ministry will be compelled to seek external support. Gold, oil, and cocoa together account for over 80% of Ghana’s export earnings. While gold may cushion the bitter economic impact of the pandemic as a hedge against mounting inflationary pressures across the globe, a country cannot afford to consider a single commodity as a winning horse.

Petroleum earnings can decline and there is an expected fall in chocolate consumption especially in Europe and North America where incomes have been hit. Further, there is obviously an increasing trend especially in developing nations to curtail expenditures on imports.

While even developed countries are reeling under economic pressure owing to an unprecedented second lockdown, Ghana with its ambitious plans for economic growth will have to encounter tough challenges during the days that lie ahead.