Ghana’s economy has shown signs of stabilising after years of turbulence, with the cedi recording an unprecedented 42.6% appreciation against the US dollar in the first half of 2025, the strongest performance in sub-Saharan Africa.
A mid-year review by Emerging Markets (EM) Advisory credited the rebound to International Monetary Fund (IMF) disbursements, surging gold prices and exports, rising remittances, and targeted central bank interventions.
Stronger fiscal balances, easing inflation, and improved revenue mobilisation also helped the government post a primary surplus of 1.1% of GDP, beating the 0.4% target, while expenditure came in 14.3% below budget.
However, EM Advisory cautioned that the recovery could be short-lived without addressing deeper weaknesses such as productivity gaps, import dependence, and fiscal pressures.
“Currency rallies can be fleeting,” the report noted. “Questions linger over how the cedi will fare once commodity prices normalise or the IMF programme ends.”
Mixed Fiscal Signals
While revenue performance exceeded expectations, customs collections fell short by GH¢1.6 billion, partly because a stronger cedi reduced the local value of imports.
The public wage bill also overshot its budget by GH¢1.3 billion due to late-2024 recruitments and persistent payroll inefficiencies, including thousands of unverified workers uncovered in audits.
Government’s arrears position remains under scrutiny. Of the GH¢67 billion in unpaid obligations reported in December 2024, an ongoing audit has rejected GH¢3.6 billion and flagged GH¢27.3 billion for further validation.
Debt servicing obligations remain steep, with GH¢20 billion due in 2026 and over GH¢50 billion in 2027 despite recent restructuring.
Policy Shifts and Sector Concerns
Recent VAT reforms aim to simplify the system, cut rates, and reduce compliance burdens by abolishing the COVID-19 levy, removing the flat-rate scheme, and raising the registration threshold for small businesses.
With compliance currently estimated at only 20%, EM Advisory stressed that enforcement, digital invoicing, and targeted exemptions will be crucial to success.
In the banking sector, the government’s GH¢2.45 billion recapitalisation of the National Investment Bank lifted its capital adequacy ratio from negative 53% to a positive 23%, safeguarding deposits and jobs. Still, concerns remain over non-performing loans across the wider financial system.
Capacity Deficits and Future Risks
The review also highlighted capacity constraints in public project delivery, including cases of contractors drawing loans without completing works and chronic under-budgeting in the energy sector.
It warned that these inefficiencies reflect a deeper capacity deficit in the public service.
Near-term risks include volatile commodity prices, potential currency reversals, and fiscal pressures from political decisions.
Medium-term challenges range from high debt servicing costs to unresolved energy deficits and climate-related shocks to agriculture.
“Stabilisation is not the same as transformation,” the report added, urging government to strengthen the Sinking Fund, broaden the tax base, and focus on high-impact, revenue-generating projects.
