Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Ghana was consistently placed among Africa’s ten fastest-growing economies since 2017, but in 2020, falling oil prices and the Covid-19 pandemic outbreak plunged the country into economic recession. According to IMF estimates, GDP growth decreased from 6.5% in 2019 to 0.4% in 2020. Supported by a strong cocoa season and mining and services activity, economic growth rebounded to 4.7% in 2021, and is expected to further accelerate to 6.2% in 2022 before slowing down to 4.7% in 2023. Lower oil production level, the emergence of new Covid-19 variants and increasing pressure on debt levels amid the loss of access to international financial markets are the major risks identified by Focus Economics.

Ghana was hit hard by the Covid-19 pandemic and the collapse in export revenues from oil and cocoa. The government put in place a support plan, the Coronavirus Alleviation Programme, worth 3% of GDP (Coface), which helped contain the effects of the pandemic but deteriorated public finances. The economic outlook improved in 2021 as activity started to recover, but the country’s public accounts remained under pressure. Public debt continued to rise, from an estimated 78.9% GDP in 2020 to 83.5% GDP in 2021, and is forecast to further soar to 84.9% GDP in 2022 and 86.4% GDP in 2023 (IMF). Ghana is classified at high risk of debt distress. In January 2022, Fitch Ratings degraded Ghana’s sovereign credit ratings. The debt is driven in part by exceptional energy and financial sector costs. Indeed, government arrears to the energy sector represent 1% of GDP each year (Coface). Debt interests payment weights heavily on the fiscal deficit, which amounted to an estimated -13.9% GDP in 2021 (down from -15.2% GDP in 2020) (IMF). Higher tax revenue and external demand for oil, gold and cocoa should help narrow the fiscal deficit to -10.5% GDP in 2022. The partial monetisation of the deficit fuelled inflation, which reached an estimated 9.9% in 2020 (IMF). As food prices spiked, inflation remained high in 2021 (9.3%) and is expected to slightly decrease to 8.8% in 2022 and 8% in 2023 (IMF). To revive the economy and attract investment, the authorities have adopted the COVID-19 Alleviation and Revitalisation of Enterprises Support (CARES) initiative, a GHS 100 billion programme over 2020-2023 30% financed by the government (Coface). Recurrent power cuts have led the Ghanaian Government to launch an energy diversification strategy, mainly by increasing the share of renewable energy and building nuclear plants. The government remains committed to the Energy Sector Recovery Programme (2019-2023) established in collaboration with the World Bank. Fiscal consolidation remains the priority, as illustrated by the additional 20% cut in the 2022 budget spending announced in January.

Despite Ghana's solid performance in terms of economic growth, the country is facing high inequalities, increasing poverty and unemployment. Ghana was ranked 138th in the 2020 Human Development Index. According to World Bank estimates, unemployment rate in the country was around 4.5% in 2020.

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