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Economic and political overview

Economic Overview

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 before the economic recession induced by falling oil prices and the Covid-19 pandemic, but this trend has changed. After rebounding to 5.4% GDP in 2021, economic growth slowed down to 3.6% GDP in 2022, in the context of the global economic shock caused by the war in Ukraine. According to IMF estimates, GDP growth is expected to further decrease to 2.8% in 2023 before increasing to 3.9% GDP in 2024. Lower oil prices and production level, fiscal and debt vulnerabilities and a challenging external environment will impede growth prospects.

In 2022, Ghana’s economy, still recovering from the impact of the Covid-19 pandemic and the collapse in export revenues from oil and cocoa, was further hit by the consequences of the war in Ukraine. Public debt increased from 82.1% GDP in 2021 to 90.7% GDP in 2022, and investors’ concerns triggered credit rating downgrades, capital outflows, loss of external market access, and rising domestic borrowing costs (IMF). 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, despite higher tax revenue and external demand for oil, gold and cocoa. Budget deficit decreased from -11.4% GDP in 2021 to -9.2% GDP in 2022, and while it is expected to further reduce, it will remain high in 2023 (-8.6% GDP), and 2024 (-8.9% GDP) (IMF). The price and supply-chain shocks caused by the war in Ukraine exacerbated the situation, leading to a large exchange rate depreciation, a surge in inflation and pressure on foreign exchange reserves (IMF). From 10% in 2021, inflation soared to 27.2% in 2022, and while declining, it is expected to remain very high in 2023 (20.9%) and 2024 (14.7%) (IMF). In December 2022, it reached 54.1% (Focus Economics). In December 2022, the IMF team reached staff-level agreement with the Ghanaian authorities on a three-year program supported by an arrangement under the Extended Credit Facility (ECF) in the amount of USD 3 billion. The program aims to restore macroeconomic stability and debt sustainability while laying the foundation for stronger and more inclusive growth. In February 2023, the government closed its domestic debt restructuring program, shifting maturities to 2028 from 2023 and reducing coupon rates (Focus Economics). Talks have been initiated with Paris Club members regarding external debt restructuring. According to IMF estimates, public debt will remain as high as 87.8% GDP in 2023 and 89.2% GDP in 2024. The Ghanaian authorities have committed to a wide-ranging economic reform program, which builds on the government’s Post-COVID-19 Program for Economic Growth (PC-PEG) (IMF). The government also remains committed to the Energy Sector Recovery Programme (2019-2023) established in collaboration with the World Bank.

Ghana is facing high inequalities, increasing poverty and unemployment. The country was ranked 133rd in the 2021 Human Development Index. According to World Bank estimates, unemployment rate in the country was around 3.9% in 2021.

 
Main Indicators 202020212022 (E)2023 (E)2024 (E)
GDP (billions USD) 70.0179.1672.8466.6267.90
GDP (Constant Prices, Annual % Change) 0.55.43.21.62.9
GDP per Capita (USD) 2,2752,5212,2702,0252,012
General Government Gross Debt (in % of GDP) 72.379.688.898.792.8
Inflation Rate (%) 9.910.031.945.422.2
Current Account (billions USD) -2.66-2.94-1.64-1.92-1.34
Current Account (in % of GDP) -3.8-3.7-2.3-2.9-2.0

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Ghana, Africa’s largest gold producer, is rich in natural resources and benefits from a fertile soil. Agriculture represents 19.7% of GDP (World Bank), and employs 30% of the country’s workforce. Arable lands cover approximately 57% of the country's total land area (FAO). Most of the cultivated lands (95%) consist of small and medium-sized farms (up to 10 hectares). Crops vary considerably depending on the region. In the forest zone (southwest), tree crops, including cocoa, oil palm, coffee and rubber, are common. Maize, legumes, cocoyam or yam, with tobacco and cotton are among the most harvested crops in the middle belt of the country. Tobacco and cotton are also harvested in the north of the country, in addition to sorghum, millet, cowpeas and groundnuts. While livestock production is important, particularly in the north, Ghana still imports meat and dairy products to meet demand.

Industry accounts for 28.3% of GDP and employs 21% of the workforce. It is dominated by mining, lumbering, light manufacturing, aluminium smelting, food processing, cement production, small commercial ship building and petroleum. Gold, bauxite and manganese mining plays a key role thanks to the country's rich subsoil resources. Rich bauxite reserves coupled with high hydro stocks provide strong potential for aluminium smelting. Ghana also has a relatively sophisticated automotive industry and exports cars to other parts of Africa.

The service sector is the largest component of the economy comprising 45.9% of GDP and employing 49% of the workforce (World Bank). The banking sector has developed and modernized in recent years but has more room to grow. Telecommunications is the main service sector due to a rapid growth of mobile phone users and the emergence of mobile payment technologies.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 29.8 21.0 49.2
Value Added (in % of GDP) 19.7 28.3 45.9
Value Added (Annual % Change) 8.4 -0.8 9.4

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Ghanaian Cedi (GHS) - Average Annual Exchange Rate For 1 USD 3.994.354.595.205.60

Source: World Bank - Latest available data.

 

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Foreign Trade

Ghana is very open to foreign trade that represented 58% of GDP in 2021 (World Bank). The government wants to create an economic environment that facilitates the development of the private sector thus guarantying transparent trades and promoting competitiveness in foreign markets. Ghana mainly exports gold and other ore and gems, petroleum oil, cocoa, nuts, woods, fish, and vegetable oils. The country mainly imports machinery, vehicles, petroleum oils, iron, electrical products, plastics, cereals and other food products, medicines and capital goods (ITC, 2021).

Ghana is a member of the World Trade Organisation and of the ECOWAS. It has also signed numerous partnership agreements, including with the EU. The European Union also supports the Ghana “Beyond Aid” program aimed at reshaping trade dynamics between the country and developed economies. Customs duties are not high but they are applied to every imported product. Ghana is using the common external customs tariffs of the ECOWAS. The import of some products such as mercury soap, hazardous wastes or contaminated products is prohibited.

Ghana's main clients are China, Switzerland, India, South Africa, and the Netherlands. The Netherlands is its main client for horticultural products. Ghana's main suppliers are China (18.2% of total imports), the United States, the United Kingdom, India and Belgium (ITC, latest data available).
 
According to WTO data, in 2021 Ghana exported goods for a total value of USD 14.73 billion while it imported goods with a total value of USD 13.63 billion. Regarding services, Ghana exported USD 9.17 billion worth of services while it imported 12.34 billion worth of services. In March 2022, the merchandise trade surplus reached an all time high of USD 676.21 million (Bank of Ghana).

 
Foreign Trade Values 20172018201920202021
Imports of Goods (million USD) 12,64713,13413,41112,42913,629
Exports of Goods (million USD) 13,83514,94315,66814,47214,727
Imports of Services (million USD) 8,4788,96110,94810,15512,338
Exports of Services (million USD) 6,4707,5639,8708,0589,174

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20172018201920202021
Foreign Trade (in % of GDP) 70.568.076.838.558.4
Trade Balance (million USD) 1,1871,8092,2572,0431,099
Trade Balance (Including Service) (million USD) -1,686-706-1,316-2,468-2,066
Imports of Goods and Services (Annual % Change) 7.75.015.9-54.5113.8
Exports of Goods and Services (Annual % Change) 23.86.612.7-50.769.1
Imports of Goods and Services (in % of GDP) 36.734.539.417.828.5
Exports of Goods and Services (in % of GDP) 33.933.537.420.729.9

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20222023 (e)2024 (e)2025 (e)2026 (e)
Volume of exports of goods and services (Annual % change) 5.43.15.43.95.5
Volume of imports of goods and services (Annual % change) 10.62.74.25.05.4

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Member of Economic Community of West African States (ECOWAS)

Member of African Union (AU)

Member of WTO

Member of Commonwealth of Nations

 

Main Partner Countries

Main Customers
(% of Exports)		 2019
China 16.7%
Switzerland 14.7%
India 14.2%
South Africa 11.8%
Netherlands 5.8%
See More Countries 36.8%
Main Suppliers
(% of Imports)		 2019
China 18.2%
United States 9.4%
United Kingdom 6.6%
India 5.6%
Belgium 5.1%
See More Countries 55.2%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Nana Addo Dankwa AKUFO-ADDO (since 7 January 2017) ; the president is both chief of state and head of government
Next Election Dates
Presidential: December 2024
Parliament: December 2024
Main Political Parties
New Patriotic Party: Ruling party, centre-right, liberal conservative
National Democratic Congress: main opposition, social democratic
People's National Convention: socialism
Progressive People's Party: social liberalism
Executive Power
Executive power is exercised by the government. The President of Ghana is both head of state and head of government. Their term length is four years and can only be renewed once. The president appoints the vice president and ministers; however, at least half of them must come from the Parliament.
Legislative Power
Legislative power is vested in the Parliament. The Parliament of Ghana bears similarities with the British Parliament and its members are elected through simple majority (or First Past the Post) voting system. Ghana is divided into 275 constituencies each electing one member of the parliament. Members serve four-year terms.
 

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COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID19 pandemic evolution and the most up-to-date statistics on the COVID19 disease in Ghana, please visit the Ghana Health Service COVID-19 Dashboard with the official data.

For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.
Sanitary measures
To find out about the latest public health situation in Ghana and the current sanitary measures in vigour, please consult the Ghana Health Service COVID-19 Dashboard.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
Ghana has placed no restrictions on imports or exports.

For a general overview of trade restrictions due to COVID-19 pandemic, please consult  the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan
For information on the economic recovery scheme put in place by the Ghanaian government to address the impact of the COVID19 pandemic on the Ghanaian economy, the Ministry of Finance proposed to parliament the Coronavirus Alleviation Programme.

For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Ghanaian government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Ghana in the IMF’s Policy Tracker platform.

Support plan for businesses
For information on the local business support scheme established by the Ghanian government to help small and medium-sized companies to deal with the economic impacts of the COVID19 epidemic on their activity, the Ministry of Finance proposed to parliament the Coronavirus Alleviation Programme.

For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters
There are no specific support plans for exporters in Ghana so far. For future possible up-to-date information please visit the website of the Ghanaian Ministry of Trade & Industry. Exporters may qualify for assistance under the Coronavirus Alleviation Programme.
 

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