Ghana enters 2026 at a genuine inflexion point, as hard-won gains in restoring economic stability must now be translated into a structural transformation that supports sustained macro-fiscal stability and job creation.
The severe crisis of 2022–23—marked by debt distress, inflation peaking at 54 percent, and loss of market access—has given way to a recovery that is real and measurable: gross domestic product (GDP) growth of 6.0 percent in 2025, inflation down to historic single-digit lows, international reserves nearly doubled from their 2022 trough, and a primary surplus well above International Monetary Fund (IMF) program targets.
This performance reflects three years of fiscal consolidation, a comprehensive debt restructuring, and sustained monetary discipline under an IMF program concluded in July 2026.
The recovery, however, remains structurally incomplete. Fiscal consolidation has relied more heavily on under-execution of capital expenditure than on structural revenue gains—a pattern that compresses public investment and limits growth potential. Sustained fiscal consolidation over the medium term will require strengthening revenue mobilization.
Economic gains have been concentrated in sectors—notably gold and services—with limited employment absorption capacity relative to Ghana’s demographic trajectory.
Between 2012 and 2023, the working-age population expanded nearly 11 times faster than net job creation, a structural imbalance that macroeconomic stabilisation alone cannot address.
The structural transformation required to link growth to jobs— particularly in more productive and labour-intensive activities in agriculture, agro-processing, and manufacturing—remains incomplete.
The transport infrastructure constraints discussed in Chapter 2 are central to understanding some of the key barriers to the economy’s transformation, as they shape the cost and feasibility of market integration, private investment, and access to employment.
At the same time, worsening external conditions in 2026—including higher energy prices, disrupted shipping, rising fertilizer costs, and tighter frontier-market financing—are putting pressure on Ghana as it consolidates hard-won gains.
The central policy challenge is therefore not simply sustaining the recovery but directing it: maintaining fiscal and monetary stability while making the structural investments needed to generate jobs at scale and protecting households from renewed inflationary pressures.
Recent Economic Developments and Outlook
Ghana’s macroeconomic recovery deepened significantly in 2025, exceeding expectations on nearly every major indicator. Real GDP grew by 6.0 per cent—the fastest pace since 2019—with non-oil GDP accelerating to 7.6 per cent, confirming that momentum extends well beyond petroleum.
Services led the expansion at 8.1 per cent, anchored by information and communication technology (ICT), transport, and education, while agriculture rebounded by 6.8 per cent, supported by a recovery in cocoa output. Industry slowed sharply to 2.3 per cent, weighed down by a fall in oil and gas output.
On the demand side, household consumption expenditure led growth— buoyed by declining inflation, cedi appreciation, and rising real incomes, though the extent to which rising real incomes were broadly shared across income groups remains uneven—while gross capital formation moderated.
Momentum continued into Q1-2026 as GDP growth reached 6.4 per cent, up from 6.2 per cent a year earlier, led by continued services activities and a recovery in industry, particularly mining and quarrying, while agriculture slowed down. Increasing freight costs, logistics disruptions, and rising agricultural input prices derived from the Middle East conflict are weighing on Ghana’s economy.
Ghana’s disinflation in 2025 was among the most dramatic in its recorded economic history. Headline inflation fell from 23.2 per cent in February 2025 to 5.4 per cent by year-end—the lowest since 1999—driven by tight monetary policy, a 28.9 per cent cedi appreciation, and easing food prices. Disinflation extended into 2026, reaching a trough of 3.2 per cent in March before rising to 5.3 per cent in June, driven by food and energy import costs.
This reflects supply constraints from higher energy and fertiliser costs linked to the Middle East conflict and climate-related production disruptions. The conflict also contributed to a sharp run-up in pump prices, pressing transport, manufacturing and agro-processing costs, and leading to a temporary fuel price relief measure introduced by authorities.
The monetary policy rate was cut progressively from 28 per cent in April 2025 to 14.0 per cent by March 2026 and kept unchanged until July—a cumulative 1,400 basis point reduction—with average lending rates falling from approximately 27.0 per cent in June 2025 to 15.6 per cent by June 2026.
The human cost of the 2022 crisis was severe, and the country is gradually recovering. The poverty rate at the lower-middle-income country (LMIC) line (US$4.20 per day, 2021 PPP1) is estimated to have risen to 56.8 per cent in 2024 as high inflation—peaking at 54 per cent—eroded real incomes.
Disinflation since 2024 has begun to reverse this trend, with the poverty rate declining slightly to 56.4 per cent in 2025 and projected to further fall to 55.1 per cent in 2026 and 54.3 per cent by 2027.
Yet poverty remains disproportionately concentrated in the three northern regions, and despite the downward trend, the absolute number of poor may still rise due to population growth, limited job creation, and GDP growth that has not translated into broad-based employment.
Macroeconomic recovery alone cannot resolve these dynamics: Inclusive growth, strengthened social protection through programs such as Livelihood Empowerment Against Poverty (LEAP), and structural transformation in agriculture and manufacturing are essential.
Furthermore, the ripple effects from increasing global tensions threaten continued poverty reduction amid slower economic growth, renewed inflationary pressures, and lower remittances.
Each one-percentage-point increase in inflation could push approximately 125,000 additional Ghanaians below the LMIC poverty line. Financial sector stability continues to improve, but vulnerabilities persist.
Bank assets expanded by 30.7 per cent to GHS 502.4 billion by June 2026, the capital adequacy ratio rose to 20.4 per cent—well above the 13 per cent statutory minimum—and real private sector credit grew by 34.1 per cent, a marked turnaround from a 4.5 per cent contraction a year earlier.
Nonperforming loans (NPLs) declined from 23.1 per cent in June 2025 to 16.1 per cent a year later but remain elevated. Most specialised deposit-taking institutions (SDIs) continue to face capital shortfalls, constituting a residual systemic vulnerability with implicit fiscal risk.
The bank-sovereign nexus remains a concern, and the Bank of Ghana (BoG) is being recapitalised following balance sheet impairment from the 2022 Domestic Debt Exchange Program (DDEP). The Cash Reserve Ratio was standardised to a uniform 20 per cent effective June 4, 2026.
Ghana’s external position has strengthened substantially on the back of a strong trade surplus. The current account surplus surged to 7.9 per cent of GDP in 2025, driven primarily by record gold export prices and a cocoa rebound. Gross international reserves (GIR) rose to US$13.8 billion (5.7 months of import cover) at the end of 2025 and US$12.9 billion (5 months) by June 2026.
The January–June 2026 trade surplus reflected continued momentum, reaching US$8.8 billion, up 53 per cent year-on-year. The rising fuel import bill, gold price volatility, and financial vulnerabilities of Ghana Cocoa Board (COCOBOD) remain key risks to the external position.
Fiscal outturns in 2025 and the first half of 2026 were stronger than expected. The primary surplus reached 2.5 per cent of GDP in 2025—well above the IMF program target of 1.5 per cent—and the overall deficit fell to approximately 1.0 per cent of GDP, far below the 2.8 per cent target.
Total revenue and grants stood at 15.7 per cent of GDP in 2025, with shortfalls in value added tax (VAT) and trade taxes offset by higher capital gains taxes and non-tax revenues.
Outperformance on the primary balance in 2025 was driven largely by under-execution of capital expenditure–38 per cent below budget–rather than revenue overperformance.
H1-2026 outturn remained on track to achieve the primary surplus target, posting a surplus of 0.9 per cent of GDP against a target deficit of 0.2 per cent, though driven entirely by expenditure compression as revenue shortfalls persisted.
No new arrears were accumulated in 2025 and H1 2026. Broader and durable efforts to strengthen the fiscal framework are central to Ghana’s macro-financial stability.
Primary surpluses achieved through capital expenditure underexecution are fragile and growth-constraining. Continued compression of public investment precisely when the Big Push Program calls for its expansion creates a policy tension between Ghana’s fiscal arithmetic and its infrastructure ambitions.
The 2026 budget—themed ‘Reset for Growth, Jobs, and Economic Transformation’—seeks a fiscal rebalancing through expanded infrastructure investment under the Big Push Program alongside revenue mobilisation efforts including VAT reform, digitally enabled customs compliance, and extractive sector tax reforms. Ghana’s comprehensive debt restructuring is nearly complete.
The US$26.5 billion domestic debt exchange was finalised in 2023, US$13 billion in Eurobonds were restructured in October 2024, and US$5.4 billion in bilateral debt is being restructured under the G-20 Common Framework, with more than half of the bilateral agreements already concluded.
The remaining external commercial debt remains under negotiation and is expected to be completed in line with IMF program parameters. Public debt declined sharply from 70.3 per cent of GDP in 2024 to 49.0 per cent at end-2025, aided by stronger growth, cedi appreciation, near completion of its debt restructuring, and fiscal consolidation.
Given these developments, Ghana’s risk of debt distress was upgraded to “Moderate” in the latest July 2026 IMF-WB LIC-DSA. With the IMF Extended Credit Facility (ECF) program completed in July 2026, a subsequent 36-month non-financing Policy Coordination Instrument (PCI) with IMF staff is expected to sustain reform momentum and build resilience beyond the ECF program.
Looking ahead, the medium-term outlook is broadly positive, though growth is expected to moderate. Real GDP growth is projected to ease to 4.8 per cent in 2026 as macro-adjustment gains taper, oil output softens, and energy cost headwinds from the Middle East conflict persist.
Ghana’s status as an oil producer and major gold exporter helps cushion the economy, but prolonged global trade disruptions from the Middle East conflict could weigh on macro-financial stability.
Growth is expected to converge toward its estimated potential of around 5 per cent over the medium term. Inflation is expected to remain within the BoG’s 8 ± 2 per cent target band, the current account is projected to remain in surplus in 2026, and the primary surplus target of 1.5 per cent of GDP is achievable provided revenue reforms are implemented as planned.
These projections are achievable—but they are not guaranteed, and the downside risks to this outlook are material. They represent the defining features of Ghana’s medium-term vulnerability.
Risks to macroeconomic stability are tilted to the downside
Externally, gold price volatility, geoeconomic fragmentation, and the Middle East conflict—which elevates energy, food, and agricultural input costs—are the primary concerns potentially weighing on growth, eroding fiscal revenues, and driving inflationary and exchange rate depreciation pressures.
Domestic risks are equally significant. Policy slippages in the energy and cocoa sectors, along with fiscal pressures from extending temporary relief measures such as fuel price interventions, could erode recent macroeconomic gains and jeopardise debt sustainability objectives. Increasing debt service payments in 2027– 2028 continue to pose rollover risks given the reliance on short-term debt instruments.
The reopening of the domestic bond market that started in April 2026 is expected to relax these financing pressures with longer-maturity instruments.
Policy Recommendations:
Ghana’s macroeconomic recovery since 2022 has been substantial, with meaningful progress across fiscal, monetary, external, and debt sustainability dimensions.
However, the durability of these gains should not be taken for granted. The recommendations below address outstanding structural challenges, organised across two tiers:
The first consolidates the macro-fiscal foundations on which sustained recovery depends; the second focuses on the structural transformation needed to translate stability into broad-based growth and job creation, with Chapter 2 examining the transport sector’s role in advancing this objective.
More detailed policy recommendations are provided in the following section. • Tier 1: Securing the Foundations: Macro-Fiscal Stability. Durable recovery requires consolidating the macro-fiscal gains achieved by the government under the IMF program. The following six priorities are essential to sustain stability—the bedrock on which private sector growth and job creation depend. → Revenue-led fiscal consolidation.
The domestic revenue mobilisation agenda is a central pillar for fiscal sustainability. Recent primary surpluses have been achieved largely through underspending rather than broad-based revenue growth. The reform priority is to broaden the base, improve compliance, and build a tax administration system capable of capturing revenues from all segments of the economy on a fair and equitable basis.
Policy actions include accelerating VAT reform implementation, strengthening customs compliance through digitisation, and reducing revenue leakages, which are critical to place fiscal consolidation on a more durable and growth-compatible footing.
→ Expenditure quality. Important policy actions were introduced in 2025 to bring fiscal consolidation back on track, namely amendments to the Public Financial Management (PFM) and Public Procurement Acts aimed at strengthening commitment controls and preventing future slippages. Yet, repeated compression of capital investment, infrastructure maintenance, and social transfers risks eroding the medium-term foundations of the recovery.
Priority should be placed on safeguarding high-return public investment, preserving priority social spending, and strengthening PFM to improve efficiency—recognising that fiscal discipline and growth-supportive expenditure are complementary, not competing, objectives.
→ Fiscal risk management. Quasi-fiscal pressures from the energy sector, COCOBOD, Ghana Gold Board (GoldBod)-related operations, and state-owned enterprises (SOEs) represent a significant and insufficiently monitored risk to the fiscal framework.
Key priorities include developing a more robust fiscal risk architecture covering systematic disclosure of contingent liabilities, integrating risk scenarios into budget planning, and strengthening SOE accountability mechanisms.
→ Monetary policy calibration. Ghana’s rapid disinflation is a significant achievement, but the inflation outlook remains exposed to exchange rate movements, energy and food price shocks, and imported inflation.
Moreover, foreign exchange (FX) market stability should be preserved. The introduction of a comprehensive FX Operations Framework in November 2025 by the BoG Board is a step forward in improving transparency in operations, building FX reserves, and managing exchange rate volatility.
Maintaining a data-dependent easing path that preserves the credibility of disinflation gains and keeps inflation durably within the 8 ± 2 per cent target band remains essential. → External resilience. The improvement in the current account and reserve accumulation has been underpinned by historically elevated gold prices and a partial cocoa recovery—conditions that may not persist.
Further progress should continue on strengthening external balances, for instance, through competitiveness, and avoid translating temporary commodity windfalls into permanent fiscal commitments. Implementation of the Ghana Accelerated National Reserve Accumulation Programme will require tight monetary coordination to manage base money expansion and inflationary pressures.
→ Financial sector stability. Improved headline banking indicators mask persistent risks, including elevated NPLs, capital shortfalls among SDIs, and sovereign-financial sector linkages that could rapidly propagate debt sustainability concerns into banking sector stress.
Continued efforts to accelerate resolution of undercapitalised institutions, complete the recapitalisation agenda—including for the BoG—and restore credit intermediation to productive sectors would help reinforce sector stability.
• Tier 2: Building for Growth: Structural Transformation (Medium- to Long-Term Priorities). Stabilisation is necessary but not sufficient. Translating macro recovery into broad-based job creation requires structural transformation—anchored by inclusive growth and a step-change in infrastructure and logistics capacity.
→ Inclusive growth and poverty reduction. Lower inflation and stronger growth have begun to ease pressure on households, but poverty remains much higher in the three northern regions, and population growth means the absolute number of poor may still be rising. Sustaining poverty reduction will require faster job creation and increased productivity in agriculture, manufacturing, and services, alongside a strengthened social protection system—anchored by LEAP—that provides timely and targeted relief to the most vulnerable households.
→ Structural transformation and diversification. Declining oil output and continued vulnerability to commodity cycles underscore the urgency of broadening Ghana’s growth base. This agenda includes enhancing export diversification, improving productivity in non-extractive sectors, and removing binding infrastructure and logistics constraints— particularly in transport and energy—that limit private investment and firm competitiveness.
Preserving macroeconomic stability is necessary but not sufficient; it must serve as the foundation for a more resilient, diversified, and employment-intensive growth model.
African Eye Report with additional files from Ghana 10th Economic Update
