Ghana needs tougher reforms to secure economic transformation – Analyst
Ghana’s economy has achieved a remarkable rebound from the depths of its 2022 crisis, but recovery remains fragile, requiring tougher reforms to secure lasting transformation, Mr Gaeten Akanwarisage Agbaam, a Development Finance Analyst, warns.
The Analyst explained that Ghana’s macroeconomic sustainability would largely depend on how banks deployed capital, strengthening of capital markets and policymakers holding their nerve in the face of political and economic pressures.
He cited consistent decline in inflation, growth in Gross Domestic Product (GDP) growth, currency appreciation, a better primary surplus, banking sector recovery, growth in insurance and ease in private sector credit as notable gains in the economy.
However, Mr Agbaam, in a review paper made available to the Ghana News Agency, stated that policymakers were challenged with managing the transition from stabilisation to sustainable growth, and reducing unemployment and poverty.
“Ghana’s recent macroeconomic recovery, characterised by renewed growth, disinflation, and external stabilisation has reinforced the resilience of its financial system. Banking-sector recapitalisation, capital-market revitalisation, and insurance-sector reforms constitute important pillars of this recovery,” he said.
Providing data to back the recovery, he noted a surge in real GDP growth from 2.9 per cent in 2023 to 5.7 per cent in 2024, and a further increase to 6.3 per cent in the first half of 2025, attributing it to reforms under the International Monetary Fund (IMF) loan-supported programme.
Headline inflation fell from 23.8 per cent in December 2024 to 6.3 per cent by November 2025, its lowest level in six years and currently below the Bank of Ghana’s 8 ± 2 per cent target band (3.2 per cent in March 2026).
“Currency appreciation, easing food prices, and the Bank of Ghana’s restrictive monetary stance were key drivers of this disinflation,” he said, noting the Central Bank’s cautious easing in monetary policy to that effect.
Mr Agbaam said the Cedi appreciated by more than 40 per cent against the US dollar by mid-2025, reversing the steep depreciation of the crisis years, while international reserves rose to cover 4.8 months of imports.
On the fiscal front, he indicated that Ghana achieved a primary surplus of 1.1 per cent of GDP by mid-2025, exceeding programme targets, with public debt, which peaked at 92.4 percent of GDP in 2022, declining to 43.8 85 per cent in June 2025 after restructuring.
By 2025, most of the country’s 25 universal banks had restored capital adequacy ratios above 13 per cent, while profits rose by 33 per cent in the first nine months of the year, but the capital market remained at a crossroad.
“The Ghana Stock Exchange (GSE) surged in 2024 but remains shallow and overly dependent on fixed income,” the Analyst said, urging deeper reforms, more listings, and stronger institutional investor capacity to make the GSE a true financing engine.
In insurance, Development Finance Analyst cited assets growth 23 per cent in 2024, and reforms such as the International Financial Reporting Standards (IFRS) 17 adoption were strengthening foundations.
“Despite the macroeconomic gains, unemployment remains stubbornly high. Overall joblessness stood at 14.5 per cent in 2025, with youth unemployment above 30 per cent and women disproportionately affected,” Mr Agbaam said.
“Sustaining progress will require continued policy discipline, strong institutions, and proactive risk management in the face of global uncertainty.”
The Development Finance Analyst recommended to banks to channel restored capital into productive lending, particularly to agriculture, manufacturing, and small businesses that generate jobs, while increasing efforts to reduce non-performing loans remain elevated.
On inflation, he indicated that while the shift from crisis-era tightening towards growth support has made the Central Bank achieve its medium-term target band of 8 ± 2 per cent, any premature loosening could undermine the hard-won stability.
“By strengthening the alignment between macroeconomic policy and financial-system development, Ghana has the potential to achieve inclusive and sustainable growth and to serve as a reference point for other emerging and frontier economies,” Mr Agbaam said.
Source: GNA