IPPG Working Paper: Ghana’s Economic Outlook꞉ Opportunities and Challenges in Trade and Policy
This IPPG working paper provides an analysis of Ghana’s current business environment, focusing on the challenges and opportunities presented by recent economic trends, policies, and trade dynamics. In 2022, Ghana experienced significant macroeconomic challenges due to domestic imbalances and external pressures, including the impacts of the Russia‑Ukraine war. These factors led to high inflation, a depreciation of the Ghanaian cedi, and decreased profitability for businesses. Despite these hurdles, Ghana’s total trade volume increased by 25.2% from GHS 292.7 billion in 2022 to GHS 366.6 billion in 2023, with mineral fuels, oils, and gold accounting for a substantial portion of exports.
In response to these economic challenges, the Ghanaian government introduced several key policies aimed at stabilizing the economy. The Domestic Debt Exchange Program (DDEP) was implemented to restructure public debt and reduce the debt servicing burden by exchanging existing bonds for new ones with different terms. The Gold for Oil (G4O) policy was also introduced to leverage Ghana’s gold reserves to purchase petroleum products with the objective of reducing the country’s reliance on foreign currency and stabilizing fuel prices domestically.
While the long‑term impact of the government’s policy interventions remains to be seen, Ghana’s economic landscape continues to be shaped by its major sectors, including agriculture, mining, and manufacturing. These sectors play vital roles in contributing to GDP and employment, despite challenges such as the impacts of climate change, limited financing, and infrastructure deficits. They also remain the backbone of Ghana’s trade and export profile, with primary export markets in Europe, Africa, and Asia, and key export commodities including gold, mineral fuels, and oils. Conversely, imports are primarily comprised of refined mineral fuels, electrical equipment, machinery, and food products sourced mainly from Europe and Asia.
Recent amendments to tax laws, including changes to excise duties and the introduction of the Growth and Sustainability Levy, reflect Ghana’s efforts to improve fiscal sustainability. These changes will have varying impacts on businesses, influencing production costs, competitiveness, and the overall economic landscape.
As Ghana continues to adapt to the evolving global market, the International Perspective for Policy and Governance (IPPG) will convene experts and stakeholders at an upcoming roundtable on Tuesday, October 8, 2024, to explore strategies for fostering a resilient and sustainable business and trade environment in Ghana. Findings and recommendations from the roundtable will be incorporated into this working paper for a final publication to offer insights and strategies to foster sustainable growth, improve resilience, and support the economic recovery and diversification of Ghana’s business and trade outputs.
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