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Home Business Ghana’s Economy Exceeds Expectations in 2024 with Strong Growth and Key Reforms

Ghana’s Economy Exceeds Expectations in 2024 with Strong Growth and Key Reforms

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Ghana’s economy has shown impressive resilience in 2024, exceeding expectations despite global challenges.

The country achieved an average real GDP growth rate of 6.3 percent in the first three quarters of the year, a notable improvement from 2.6 percent during the same period in 2023. This strong performance was supported by quarterly growth figures of 4.8 percent in Q1, 7 percent in Q2, and a five-year high of 7.2 percent in Q3. The non-oil sector also saw substantial growth, expanding by 6.2 percent, compared to just 2.6 percent in 2023.

This growth puts Ghana on track to surpass the IMF-supported programme’s revised GDP growth projection of 4 percent. However, inflationary pressures continued to challenge the economy. Consumer inflation rose to 23 percent in November 2024, up from 22.1 percent in October, despite a significant decline from its peak of 54.1 percent in 2022. The Bank of Ghana responded by reducing its benchmark policy rate twice during the year, though the rate remained at 27 percent in November due to persistent inflationary pressures.

On the fiscal side, Ghana’s progress under the Post-COVID-19 Programme for Economic Growth (PC-PEG) has been notable. The country successfully secured a US$360 million disbursement from the IMF in 2024, bringing total disbursements to US$1.92 billion. Ghana also made significant strides in fiscal consolidation, improving its primary balance from a 4.3 percent deficit in 2022 to a 0.4 percent surplus in mid-2024. Additionally, the country’s gross international reserves rose to US$7.7 billion by October 2024, providing 3.5 months of import cover.

Debt restructuring efforts made considerable headway in 2024, with Ghana reaching agreements to restructure US$18 billion in debt. This included a US$5.1 billion restructuring of bilateral loans and a US$13.1 billion debt restructuring agreement with Eurobond holders. As a result, Ghana’s debt-to-GDP ratio dropped from 79.2 percent in September to 74.6 percent by October 2024, marking a significant reduction in public debt. The IMF has praised Ghana’s swift and successful debt negotiations under the G20 Common Framework.

In the energy sector, the government reached agreements with Independent Power Producers (IPPs) to restructure legacy arrears and power purchase agreements, providing fiscal relief and ensuring a reliable power supply. Meanwhile, the banking sector saw a surge in total assets, which grew by 42.4 percent to GH₵367.2 billion by October 2024. Private sector credit expanded by 28.8 percent, a sharp rebound from the previous year’s contraction.

Support for small and medium enterprises (SMEs) also remained a key policy focus, with nearly GH₵2.1 billion allocated to the SME Growth and Opportunity (GO) programme. This funding supported high-growth SMEs and micro, small, and medium enterprises (MSMEs), including GH₵700 million provided to the Ghana Exim Bank for subsidized financing.

Despite pressure on the Ghanaian cedi, which depreciated by 28 percent against the US dollar in 2024, the central bank’s intervention helped stabilize the currency. In the fixed income market, treasury bills saw strong investor interest, and the secondary bond market showed signs of recovery, with traded volumes reaching GH₵153.5 billion by November. On the equities front, the value of shares traded surged by 165.4 percent, reaching GH₵1.996 billion, while market capitalization climbed to GH₵108.4 billion.

In conclusion, Ghana’s economic performance in 2024 has demonstrated impressive resilience, with strong growth in key sectors, successful debt restructuring, and ongoing fiscal reforms. While challenges remain, including inflation and currency pressures, the outlook for the economy remains positive, driven by robust GDP growth and continued structural reforms.

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