Can Ghana turn economic stability into lasting transformation?

Ghana’s growth, inflation and debt indicators are moving in the right direction, but gold is doing almost all the heavy lifting. As the 2027 budget statement approaches, and the announcement of a $10bn New Economy programme, the question is whether the government can transform macroeconomic stability into productive investment, diversified exports and lasting employment. 

At the International Monetary Fund Annual meeting in Bangkok this month, Zeine Zeidane, Director of the IMF’s Africa Department, had high praise for Ghana’s economy. 

“The performance has been strong up to now. And recently, there was an upgrade of Ghana. So, things in Ghana are moving in the right direction,” he said, adding, for good measure, “Ghana is in a very good place.”

This would have been music to the ears of the country’s economic managers, including Dr Ato Forson, the Minister of Finance, who was present at the meeting. Forson’s tenure, which began in early 2025, has coincided with a rebound from a period of crisis for the Ghanaian economy, which he has not been hesitant to take credit for. 

“The sustainable economic recovery was built on good policy choices, competent economic management, disciplined execution and courageous leadership,” Forson declared as he presented the government’s mid-year fiscal review to Parliament in July. 

Forson’s victory lap is understandable, if, as some might argue, a little premature. After years of fiscal distress, high inflation and currency instability, the country has made significant progress in restoring macroeconomic order. Inflation has fallen sharply, public debt has declined following restructuring, and fiscal adjustment and stronger export earnings have helped rebuild external buffers. 

Not all that glitters

And yet, the topline figures conceal at least part of the real story. 

Much of the improvement in Ghana’s external position has been supported by gold, whose rising price and increased export volumes have delivered a substantial windfall. Nonetheless, unemployment, low productivity and widespread poverty remain persistent challenges. The economy is recovering, but it is not yet clear whether its capacity to generate secure, well-paid employment is improving at the same pace.

According to Richmond Commodore, senior economist at the African Centre for Economic Transformation, an Accra-based think tank, “progress has been stronger in macroeconomic stabilisation and fiscal management than in transforming the productive economy”.

The improvement in macro-economic indicators has indeed been significant. 

Inflation in September was 5.2%, higher than in previous months, like the 3.2% recorded in March 2026, but well below the 54.1% it notched in December 2022, at the height of the economic crunch. Fiscal adjustment, debt restructuring, currency appreciation and growth in GDP have also led to a decline in public debt, from around 93% of GDP at the end of 2022 to 48.8% at the end of 2025.  

The government is keen to sustain these gains and, as Commodore points out, seeks to maintain fiscal responsibility through tighter controls as well as an Independent Fiscal Council and a Value for Money Office. After the domestic debt exchange launched in 2022, the government is also preparing sinking funds to meet debt repayments due in 2027 and 2028. Investors, the IMF and other stakeholders will welcome these measures. 

But whether the country’s private sector is growing and hiring as a result is a different question entirely. Some economists have questioned how far Ghana’s improved economic performance reflects structural reforms, as opposed to favourable conditions in the gold market. 

Professor Robert Darko Osei, director of the Institute of Statistical, Social and Economic Research at the University of Ghana, warned during the launch of the State of the Ghanaian Economy Report in October that the country’s reliance on gold was not a sustainable foundation for long-term growth.  

“Relying so much on point-source resources such as gold cannot be sustainable, particularly given the fact that prices of some of our exports are exogenously determined,” he said. 

Osei added that Ghana’s improved position was “being driven by a sector that we do not have significant control over”. His concern is borne out by the export figures. Ghana recorded merchandise exports of about $32bn in 2025, helping produce a record trade surplus of GH¢148.3bn. But gold alone accounted for 63.1% of total exports, according to the Ghana Statistical Service, up from 38.5% in 2004. Manufactured goods, in contrast, represented less than 6%. 

“Gold is our anchor, but at the same time it is our greatest exposure,” Government statistician Alhassan Iddrisu said when presenting the GSS trade report. “When one product carries an economy, a swing in its world price is felt by everyone, from the national treasury to traders and households.” 

Changing gears

The problem for many, including Commodore, is that gold’s performance is masking real vulnerabilities for the Ghanaian economy, including the fact that it still rests on raw exports and productivity remains low. “Preliminary analysis for ACET’s forthcoming African Transformation Index still shows that the country’s progress on diversification and export competitiveness has been weak and declining,” he revealed to New African Magazine.

Commodore says three factors are responsible for the “weak transmission from stabilisation to investment and job creation.” First, he says, are the high operating costs, driven by infrastructure deficiencies, unreliable or expensive energy, and limited access to long-term finance. Meanwhile, he points out, “the Iran-US war has increased uncertainty, raising the prices of fuel and imported capital”.

Secondly, the government’s fiscal consolidation efforts have restrained public expenditure, which Commodore says fell to 1.4% of GDP in 2025, down from 2.5% in the previous year. “While this supports fiscal stability, it delays the investments needed to improve productivity and expand economic opportunity for all,’ he noted.

Lastly, “growth remains concentrated in activities that do not generate sufficient formal employment opportunities across the economy”. Gold, for example, may do wonders for the national bottom line but does not generate much of a boom in employment. Similarly, infrastructure, which the government is investing in, brings with it largely temporary, project-based employment that disappears once projects are completed. 

Commodore says that the government will need to tackle three key priorities if it is to leverage macro-economic growth into sustainability and resilience. It needs to maintain fiscal discipline and make debt repayment plans transparent. It has to mobilise domestic revenue without imposing unnecessary costs on productive businesses and formal workers. And it also needs to direct public investment towards infrastructure and sectors capable of generating higher productivity and more diverse exports.

Rhetorically, at least, the government appears cognizant of the need to change gears, with the announcement of a “New Economy” which it says will be launched with the 2027 budget statement, expected in November. Details remain sketchy for now, but President John Mahama has said it involves mobilising $10bn in investment over four years towards seven priority areas, with agriculture and agro-processing receiving half of the amount. 

Commodore says the programme is a potentially important shift towards productive investment, but warned that its credibility depends on a clear financing and implementation plan. “While the $10 billion ambition is economically defensible as an industrial investment strategy, its financial feasibility remains to be demonstrated through a detailed and transparent financing plan,” he said. 

It remains to be seen also whether the government can prevent its commitment to the “New Economy” programme from derailing its fiscal strategy. With looming debt repayments in 2027 and elections also in sight, Commodore says that the risk of this happening is likely to be enhanced.

Recent domestic resource mobilisation efforts, including the use of technology, however, offer some hope, according to him. 

“But more remains to be done to broaden the tax base, improve compliance and reduce revenue leakages if the government is to stay financially buoyant enough to pursue this programme,” he cautioned. 

The 2027 budget statement is expected to provide more details about the programme, but it will also have a broader task of assuring citizens, especially, that the benefits of the fiscal consolidation programme will soon be felt, in the local parlance, in their pockets. Minister Forson has given some assurance already. 

 “Stabilisation was never the destination. It was the price of entry,” he said in September during an engagement with officials of the Ministry of Trade, Agribusiness and Industry. “Ghana has paid that price. What comes next is the work that changes lives at scale – the work of transformation.”

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