Ghana’s economy risks a prolonged stagnation, with growth projections by the International Monetary Fund (IMF) signaling that the country’s GDP will hover between 4% and 5% annually until 2029, failing to rebound to pre-crisis levels.
The Institute for Fiscal Studies (IFS), a leading economic policy think tank, has sounded the alarm, warning that sluggish growth could stifle job creation and deepen unemployment, particularly among youth already grappling with limited opportunities.
The IMF’s December 2024 report paints a sobering picture: Ghana’s real GDP growth plummeted to 3.8% in 2022 and 2.9% in 2023, a sharp decline from pre-crisis averages that once buoyed hopes for rapid development. While a modest recovery to 4.4% average growth is forecast through 2029, analysts argue this pace remains insufficient to absorb the estimated 300,000 young Ghanaians entering the job market yearly. “Persistently low growth locks the nation into a cycle of underemployment and missed potential,” an IFS spokesperson noted, urging policymakers to prioritize “bold, sector-specific reforms.”
The IFS has challenged the incoming government—set to take office after Ghana’s 2024 elections—to break from reliance on IMF frameworks and instead pursue aggressive investments in agriculture and value-added industries. With public finances strained by debt restructuring and austerity measures, the institute emphasized targeted spending to revitalize sectors capable of generating jobs and reducing import dependency. Agriculture, which employs nearly 40% of Ghanaians but contributes just 20% to GDP, emerged as a focal point. Strengthening productivity through mechanization, irrigation, and access to markets could spur rural employment while stabilizing food prices and curbing inflation, the IFS argued.
Critics, however, question whether political leaders can reconcile short-term fiscal pressures with long-term growth strategies. Ghana’s debt-to-GDP ratio, hovering near 85%, limits room for stimulus spending, pushing policymakers toward public-private partnerships and foreign direct investment. Yet bureaucratic delays and inconsistent regulations have historically deterred private sector participation.
The IMF’s projections also cast doubt on Ghana’s ability to meet its industrialization goals under the African Continental Free Trade Area (AfCFTA), which hinges on competitive manufacturing and export diversification. Without faster growth, analysts warn, the nation risks falling behind regional peers like Ivory Coast and Senegal, whose economies are expanding at 6% or higher.
For now, the IFS’s call to action underscores a stark reality: Ghana’s path to recovery demands more than fiscal discipline—it requires visionary leadership willing to transform vulnerabilities into opportunities. As one Accra-based economist put it, “Growth at 4% isn’t a forecast; it’s a wake-up call.” The question remains whether Ghana’s next administration will heed it.
