Ghana’s ambitious inflation target of 11.9% for the end of 2025 is within reach, according to Dr. Adu Owusu Sarkodie, an economist at the University of Ghana. He credits the sustained appreciation of the Ghanaian cedi, declining global commodity prices, and strict fiscal and monetary measures as key drivers of this positive outlook.
“The target for the year is 11.9%. That’s around 12, right? We are currently at 18%. It’s possible, especially with the appreciation of the cedi. The cedi’s appreciation has really helped in the fight against inflation,” Dr. Sarkodie explained in an interview with The High Street Journal.
Since mid-2024, Ghana has experienced a consistent decline in core monetary indicators such as M1, M2, and credit to the private sector. This is largely the result of the government’s commitment to tight fiscal discipline, supported by the IMF programme, and the Bank of Ghana’s aggressive stance on monetary tightening. “Everything is in the essence of fighting inflation,” Dr. Sarkodie said.
He acknowledged that although such policies have slowed credit growth to the private sector and raised the cost of borrowing, the overall goal is macroeconomic stability. “The lending rate is still very high, around 20%, and that makes borrowing expensive. But the government is trying to stabilize the economy before pushing for growth,” he noted.
Dr. Sarkodie also pointed to global tailwinds working in Ghana’s favour. Falling international goods prices and reduced import costs, due to the cedi’s strength, have helped slow the pace of inflation domestically. Additionally, the Ministry of Finance’s decision to cut government expenditure signals a long-term shift toward fiscal responsibility.
Looking ahead, he anticipates further improvement in Ghana’s macroeconomic conditions by the first quarter of 2026, provided current policies are sustained. “Things hopefully will normalize by the first quarter of 2026, that’s where I believe everything will come back to normal, to the pre-COVID levels,” he said.
Dr. Sarkodie cautioned, however, that global risks, such as rising geopolitical tensions in the Middle East, could pose indirect threats to Ghana’s recovery, especially if they result in higher international prices for essential commodities like fuel and gold.
Despite these risks, he remains optimistic. With improved monetary control, disciplined public spending, and smart leveraging of Ghana’s natural resources, including lithium and gold, he believes the economy is on a path toward stability and inclusive growth.
