Hurriedly putting his government together a few weeks after being sworn in as the President of Ghana, His Excellency President Nana Addo Dankwa Akufo-Addo hit the ground running, intimating in a famous interview that “I’m in a hurry.’’ By the middle of 2019, Ghana’s economy had blossomed with positive, optimistic economic figures covering almost every sector. For instance, according to the Ghana Statistical Service, Ghana’s Agriculture and sub-sectors real growth rate was 6.1% and 4.8% for 2017 and 2018, respectively. Ghana’s economy was in ascendancy even though short-lived due to external exigencies of COVID-19 and the Russia-Ukraine war.
SITUATION BEFORE THE EFFECTS OF EXTERNAL SHOCKS
Ghana’s oil production experience has highlighted the resource’s double-edged nature. Initially, crude commercial output transformed the West African nation into a top investment hub. However, this newfound wealth also led successive governments to accumulate significant debt.
Investors have grown wary, dumping Ghana’s bonds and currency, the cedi, due to concerns over the country’s ability to service its debt. As a result of rising fuel costs (before the emergence of the Gold-for-oil policy), global supply chain disruptions, over-reliance on primary commodities and global economic pressures due to COVID-19, the cedi’s value plummeted, fueling skyrocketing inflation of above 50%. However, recent, well-managed measures by the government have ensured a sharp reduction in inflation to 20%, and it’s expected to fall further.
President Nana Akufo-Addo’s administration has sought assistance from the International Monetary Fund (IMF) to address these economic challenges, requesting a package worth up to $3 billion. Largely due to some prudence in place, noticeable macroeconomic gains have been embraced since the beginning of the first quarter of 2024 through corrective Fiscal and Monetary policies tailored to influence total demand, timely Debt Restructuring, Investment in Key Sectors including harnessing the opportunities offered by the Africa Continental Free Trade Agreement (ACFTA) and the government’s keen pursuit of Fiscal Consolidation.
WEST AFRICA’S RISING STAR
Ghana, West Africa’s shining star, has navigated economic challenges and emerged stronger. President Nana Akufo-Addo’s administration has implemented strategic reforms, fostering growth and restoring investor confidence.
Ghana’s appeal to investors stemmed from its reputation as a beacon of stability in a region often plagued by turmoil. As the first sub-Saharan African nation to achieve independence, Ghana has consistently held peaceful elections since the inception of its 4th Republican Constitution in 1992, with power transferring smoothly.
ECONOMIC STABILITY
Ghana’s economic stabilization efforts have yielded impressive results, with its fiscal deficit decreasing from 7.4% of GDP in 2016 to 4.5% in 2022, per IMF data. The inflation rate dropped to 12.3% in 2023, down from 15.4% in 2022, according to the Ghana Statistical Service. Refreshing of all, Ghana’s Cedi currency regained 15% of its value against the US dollar in 2023.
GDP GROWTH
Ghana’s Gross Domestic Product (GDP) growth rate is projected to rebound with a 5.6% growth rate forecast for 2024, up from 3.4% in 2020. Ghana’s impressive GDP growth of 6.9% for the second quarter of 2024 is the fastest in about 5 years, significantly driven by its Agriculture, Industry, and Services sectors.
By the end of 2024, the GDP of Ghana is anticipated to reach USD 78.97 billion with a 2025 projection of USD 82.36 billion.
AGRICULTURAL RESURGENCE
Ghana Cocoa Board states Ghana’s cocoa sector has witnessed remarkable growth in cocoa production, which increased by 15% in 2022/2023, reaching 850,000 metric tons.
Within the same period under review, data by the Ministry of Food and Agriculture (MOFA) indicates Ghana’s Agricultural exports rose by 20%, driven by mangoes, pineapples, and cashews.
TECHNOLOGY AND INNOVATION
With over 200 technology start-ups emerging in 2022, Ghana’s tech industry is thriving, focusing on Fintech, E-commerce, and Healthtech.
Data by the Bank of Ghana indicates Digital payments grew by 25% in 2022, reaching $50 billion in only one fiscal year.
TOURISM REVIVAL
Ghana’s tourism sector is bouncing back steadily, driven by cultural heritage and eco-tourism. For instance, Visitor numbers increased by 15% in 2022, as captured by the Ghana Tourism Authority. The Nana Addo and Dr Bawumia’s administration made positive strides in Tourism revenue in 2017 of about USD 919 Million. Travel restrictions due to the COVID-19 pandemic adversely affected Ghana’s revenue from Tourism. Nonetheless, the Nana Addo and Dr Bawumia’s administration spearheaded year-on-year revenue growth of the Tourism industry leading to about USD 664 Million contribution to Ghana’s GDP in 2021, a 348% increase from the USD 191 Million generated in 2020. Ghana went on to record its highest Tourism revenue of USD 2 Billion in 2022.
It is no wonder that President Akufo Addo’s government invested a whopping $100 million in tourism infrastructure development in 2022.
INFRASTRUCTURE DEVELOPMENT
The Government’s strategic investments in infrastructure have enhanced connectivity and trade tremendously. Of great notice is the $2 billion invested in transportation infrastructure between 2020-2022 through Ghana’s Ministry of Roads and Highways Authority.
Huge investments in the expansion and efficiency of the coastal nation’s ports and harbours increased cargo handling capacity by 30%.
FOREIGN INVESTMENT
Painstaking research revealed through the Ghana Investment Promotion Authority that Ghana’s investment climate has improved admirably since 2017, with an increase in Foreign Investment by 15% in 2022, driven mainly by significant interests in agriculture and renewable energy.
The steady gains chalked through the ingenuity of President Nana Addo and Dr Bawumia’s administration, despite the effects of external exigencies, made Ghana ranked 2nd in West Africa for ease of doing business, according to the World Bank.
HUMAN DEVELOPMENT
The life expectancy of Ghanaians increased to 68.4 years in 2022, up from 66.7 years in 2019, according to the data of the World Health Organization (WHO). Within the same period under review, access to education improved, with an 85% net enrollment rate in 2022, made possible by the legacy policy of the government’s Free Senior High School (Free SHS).
Having enjoyed free secondary school education at Nandom Senior High in the Upper West Region, the writer relates better and understands the positive impact of Free SHS on Ghanaian households.
CHALLENGES AND FUTURE PROSPECTS
Admittedly, challenges persist, but Ghana’s economic foundation has been strengthened by the Government’s commitment to private sector development and business-friendly policies, diversification efforts to reduce dependence on its traditional commodities, and Investments in human capital and infrastructure.
CONCLUSION
Ghana’s economic resurgence underscores the nation’s resilience and determination. With continued reforms and investments, Ghana is poised to reclaim its position as a beacon of stability and growth in West Africa. A new NPP government will possibly take over on 7th January 2025 to fulfil Ghana’s full potential through implementing Bold Solutions for the Future. There is an urgent need for continuity and sustenance of Ghana’s gains.
By: Razak Adamah Vemmie