Ghana faces significant challenges in meeting its development goals, according to a new report by the African Development Bank (AfDB). The report points out that Ghana must raise $4.87 billion per year until 2030 to meet the United Nations’ Sustainable Development Goals (SDGs) and an additional $850 million annually until 2063 to achieve the African Union’s Agenda 2063. However, the country is currently only generating about one-third of the necessary funds, leading to a significant shortfall.
To close this gap, the AfDB advises that Ghana increase its tax revenue by at least 3.8% of GDP for the SDGs and by 0.7% for Agenda 2063. The bank also suggests that the government allocate more resources to crucial sectors like education and energy.
The AfDB notes that while the financial needs for transforming Ghana’s economy are large, they are achievable. With only five years left to meet the 2030 SDGs, the lack of adequate funding poses a serious threat to Ghana’s ability to reach these targets. Without sufficient revenue, many Ghanaians may continue to live in poverty even after the 2030 deadline.
The AfDB also observes that Ghana must implement reforms to stabilize its economy. The bank proposes that the government should focus on policies that control inflation, stabilize the exchange rate, and reduce the public deficit by cutting unnecessary spending and increasing domestic revenue. Additionally, Ghana should fast-track its ongoing debt restructuring, seek more affordable financing, and improve access to credit.
Over the last 30 years, Ghana has seen economic growth, but this growth has not led to significant structural changes in the economy. Ghana achieved lower middle-income status in 2010, largely due to oil production and stable policies. However, the recovery from the COVID-19 pandemic has been slow. Real GDP growth slowed from 5.1% in 2021 to 3.8% in 2022, and it is expected to decrease further to 2.9% in 2023 due to economic instability, global financial challenges, and the impact of various shocks.
The AfDB cautions that without strong measures to achieve meaningful economic transformation, Ghana’s growth will remain vulnerable to both internal and external shocks.
