Ghana’s Economic Crisis: A call for unity and sacrifice

As of February 2025, Ghana's economic outlook presents a blend of challenges and opportunities.

Economic Growth:

In 2024, Ghana experienced robust economic performance, with an average real GDP growth rate of 6.3 per cent over the first three quarters, significantly higher than the 2.6 per cent recorded during the same period in 2023.

This growth was driven by expansions of 4.8 percent in the first quarter, 7.0 percent in the second quarter , and 7.2 percent in the third quarter, the highest quarterly GDP growth in the last five years.

Looking ahead, projections for 2025 vary among institutions. The International Monetary Fund (IMF) forecasts a real GDP growth of 4.4 percent for Ghana in 2025, while the World Bank anticipates a slightly higher expansion of 4.2 percent.

Inflation and Fiscal Policy:

Inflation remains a concern, with the IMF projecting consumer prices to rise by 11.5 percent in 2025. To address fiscal challenges, President John Mahama has called for a "National Economic Dialogue" aimed at reviewing and potentially overhauling the existing $3 billion IMF program.

This initiative seeks to align the program with current economic realities and promote sustainable growth.

Debt Restructuring:

In late 2024, Ghana successfully completed a $13 billion debt restructuring, reducing its debt burden by $4.7 billion. This move positions the country to exit a nearly two-year default and re-enter global capital markets.

Sectoral Performance:

Industry: The industrial sector is projected to grow between 4 and 6 percent in 2025, supported by gains in gold mining and emerging lithium production.

Services: Services is anticipated to be a major driver of economic growth in 2025, bolstered by reforms and technological investments.

Agriculture: Growth in the agric sector is expected to average around 3.1 percent year-on-year for 2025, with challenges including climate-related issues and constrained financing.

Poverty and Employment:

Poverty rates are projected to rise until 2026, peaking at 31.5 percent in 2025 before slightly declining. This trend is attributed to limited growth in services and agriculture, coupled with rising prices outpacing income growth for the poorest segments.

In summary, while Ghana faces economic challenges, including inflation and poverty, strategic initiatives such as debt restructuring and policy reforms offer a pathway toward sustainable growth and fiscal stability.