Ghana’s economy showed notable signs of recovery in 2024, led by strong industrial growth, particularly in construction and gold production, but fiscal and structural challenges persist, the Institute of Statistical, Social and Economic Research (ISSER) has cautioned.
Presenting the 2024 edition of the State of the Ghanaian Economy Report (SGER) at the University of Ghana, Professor Robert Darko Osei, Director of ISSER, said the country’s economic rebound was commendable, although the outlook for 2025 appeared moderate.
He said the industrial sector had been the main driver of growth, yet fiscal consolidation efforts were constraining public investment and slowing expansion in key sectors.
“Fiscal consolidation is good and necessary, but it comes with costs. Our fiscal space remains constrained, and investment spending is still low,” Prof. Osei said.
He acknowledged that the government’s fiscal prudence had produced positive results, including lower deficits and improved discipline, but called for greater efficiency in public expenditure and more strategic investment prioritisation to sustain growth.
On revenue mobilisation, Prof. Osei noted that Ghana’s overreliance on the informal sector limited the tax base. He cautioned against overtaxing the same group of compliant taxpayers, urging reforms to expand coverage instead.
“The challenge is not to get the same people to bleed to death with taxes. It’s about expanding the base so more people can contribute,” he said.
He recommended a review of tax exemptions and public procurement practices, adding that improved expenditure efficiency was the fastest route to creating fiscal space in the short term.
Touching on macroeconomic indicators, the ISSER Director cited the Ghana cedi’s relative stability, declining inflation, and rising foreign reserves, estimated at around 12 billion dollars, as signs of renewed confidence in the economy.
He, however, urged stronger institutional oversight and the effective enforcement of the Fiscal Responsibility Act (Act 982) to preserve gains and prevent future fiscal slippages.
“The economy is certainly on the mend, but we are not out of the woods yet. We cannot afford to sleep,” he cautioned.
Prof. Osei also noted that global trends, including projected declines in commodity prices, could have mixed implications for Ghana, as they would reduce fuel import costs while lowering export earnings.
He advised more investment in value addition and better management of gold reserves to cushion the economy against external shocks.
Supporting the findings, Professor Ebo Turkson of the University of Ghana’s Department of Economics described 2024 as one of the country’s most stable macroeconomic periods in recent years, citing stronger cedi performance, reduced debt levels, and improved investor confidence.
“The Ghana cedi is the best-performing currency in the world this year, and for the first time, we could see it appreciate year-on-year,” Prof. Turkson said.
He added that Ghana’s debt-to-GDP ratio had declined to about 45 percent, with improvements in reserves and the balance of payments. Fiscal deficits were expected to remain within the five per cent limit as the government continued efforts to manage expenditure.
Prof. Turkson credited the progress to improved coordination between the Ministry of Finance and the Bank of Ghana, noting that falling interest rates could encourage private sector credit growth.
He, however, urged policymakers to pursue structural transformation to sustain recovery, cautioning that continued dependence on commodities like gold posed long-term risks.
“We cannot depend on commodities to build resilience. This is the time to diversify production, support the 24-hour economy initiative, and expand infrastructure to drive industrialisation,” he said.
The State of the Ghanaian Economy Report is ISSER’s flagship annual publication, providing a comprehensive analysis of Ghana’s macroeconomic performance, fiscal trends, and sectoral developments to inform policy decisions and public discourse.
