WB: Ghana’s economic indicators on track for ’24

Ghana’s economic indicators remain on track for 2024 and beyond, despite recent increases in exchange rate depreciation and slower-than-expected inflation reduction, according to the World Bank. The report highlights significant progress in addressing severe macroeconomic imbalances from 2022.

Efforts to restore fiscal and debt sustainability, reduce inflation, and strengthen financial stability have shown results. Economic growth in 2023 reached 2.9 per cent, exceeding initial projections, while inflation fell to 23.2 per cent in December 2023 from 54.1 per cent in December 2022.

Michelle Keane, World Bank Acting Country Director for Ghana, emphasised the importance of maintaining reform momentum to support Ghana’s economic rebound and promote long-term inclusive growth. The World Bank report underscores the need for quality fiscal adjustments, improved public financial management, and accelerated revenue mobilisation.

Sector-specific reforms in agriculture and energy are crucial for ensuring financial sustainability and rebuilding capital buffers in the financial sector. Additionally, structural reforms are needed to revitalise growth and diversify Ghana’s economy by improving infrastructure, the business climate, and access to long-term financing. Investing in human capital and service delivery for underserved regions will attract investment.

The report also highlights Ghana’s low tax collection rates. From 2017 to 2021, Ghana’s average tax collection was 13.2 per cent of GDP, 8 percentage points short of its estimated capacity. Addressing inefficiencies in tax policy and compliance mechanisms is vital for ensuring macroeconomic stability and supporting long-term growth and poverty reduction.

Economist Kwabena Gyan Kwakye stressed the need to enhance fiscal transparency and resilience while expanding targeted social protection programs to promote social inclusion.