Ghana’s Debt Exchange Programme was meant to help the country manage its debts better. But instead, it has made borrowing harder for businesses, leaving them struggling with cash flow and shrinking profits. This surprising twist was revealed in the Ghana Investment Promotion Centre’s (GIPC) latest quarterly report for 2024.
Globally, investments have been facing challenges. Foreign Direct Investment (FDI) dropped by 2% in 2023 as trade tensions, slower growth, and shifting policies made businesses more cautious.
Despite these tough times, Ghana’s economy showed strong signs of recovery in 2024. In the first half of the year, GDP growth climbed to 6.9%, inflation dropped from a shocking 54.1% in December 2022 to 21.5% by September 2024, and the country’s reserves improved, covering 3.1 months of imports.
GIPC’s report also highlighted efforts to make Ghana’s business environment better. Regulatory changes have reduced red tape, and Ghana scored 66.91 on a competitiveness scale, showing its growing strength in West Africa. Things were looking up, on paper, at least.
But behind the progress, businesses are feeling the pinch. The Debt Exchange Programme, meant to ease Ghana’s debt burden, has made it harder for companies to get loans.
With less cash to work with, many businesses are struggling to stay profitable. The Bank of Ghana’s recent surveys showed that while consumer confidence improved (rising from 81.2% to 87.6% by August) and businesses were feeling a bit more optimistic (confidence rose from 88.1% to 91.1%), the credit crunch has dampened this positive outlook.
Investors still see Ghana as a place to put their money, but they are being cautious.
