The African Development Bank (AfDB) has projected a 4.5% growth in Ghana’s Gross Domestic Product (GDP) by the close of 2025, according to its African Economic Outlook Report. The report, unveiled during the AfDB Annual Meetings in Abidjan, Côte d’Ivoire, offers a detailed analysis of key economic indicators across Africa.
Key Economic Drivers and Sectoral Insights
The anticipated growth for Ghana is expected to be fueled by robust performance in the mining sector, which continues to benefit from strategic investments and strong commodity prices. The AfDB also cites Ghana’s ongoing fiscal consolidation measures, which are progressively narrowing the fiscal deficit and stabilizing the macroeconomic environment.
Moreover, higher interest rates are seen as a double-edged sword—attracting investment while posing potential challenges for businesses reliant on credit. Encouragingly, the AfDB forecasts a further rise in GDP growth to 4.8% by 2026, reflecting sustained economic momentum.
Comparing Projections: AfDB, Government, and International Institutions
Ghana’s Finance Minister, Dr. Ato Forson presented a slightly more cautious outlook in the 2025 national budget, projecting overall GDP growth at 4.0%, with non-oil GDP growth anticipated to reach 4.8%.
The World Bank, in its Africa’s Pulse Report (April 2025), aligns closely with the government, forecasting 3.9% growth for 2025, and projecting an upward trajectory to 4.6% in 2026 and 4.8% in 2027. Similarly, the International Monetary Fund (IMF) predicts a 4.0% growth rate for 2025 and a jump to 4.8% in 2026, mirroring the AfDB’s optimism for medium-term recovery
Inflation Challenges: Divergent Forecasts
Inflation remains a critical concern for policymakers and analysts alike. While Ghana’s Ministry of Finance is optimistic, targeting an end-year inflation rate of 11.9% for 2025, the AfDB takes a more conservative stance, forecasting inflation at 15.4%. This represents an improvement from April 2025’s rate of 21% but falls short of government targets.
The IMF echoes concerns over inflationary pressures, projecting a higher rate of 17.5% for 2025. However, both the AfDB and IMF foresee significant improvement by 2026, with inflation potentially dropping to single digits—9% according to the AfDB—driven by tight monetary policies, a stable cedi, and declining food prices.
Fiscal Discipline and Debt Management
Fiscal consolidation remains a cornerstone of Ghana’s economic strategy, with the AfDB projecting a narrowing of the fiscal deficit to 3.5% of GDP in 2025 and further to 3.0% in 2026. The debt-to-GDP ratio, a critical metric of fiscal health, is expected to decline to 66.4% in 2025, reflecting successful debt restructuring and enhanced revenue mobilization efforts.
On the external front, the AfDB anticipates a positive trend in Ghana’s current account balance, projecting a surplus of 2.6% of GDP in 2025 and 1.4% in 2026, supported by increased exports of oil and gold.
Risks and Recommendations
Despite these promising figures, the AfDB has flagged potential risks that could derail Ghana’s recovery. These include the adverse effects of climate variability on agriculture—especially cocoa production—and policy reversals that could undermine fiscal consolidation. External shocks, such as rising U.S. tariffs and global economic uncertainties are also highlighted as threats.
To mitigate these risks, the AfDB stresses the importance of maintaining a disciplined approach to fiscal policy, deepening structural reforms, and building resilience against climate and external shocks.
Outlook for 2026 and Beyond
Looking ahead, the AfDB’s projections paint an optimistic picture for Ghana’s medium-term economic future. With sustained efforts in fiscal management, diversification of the economic base, and a commitment to structural reforms, Ghana is well-positioned to achieve its developmental goals.
The path to recovery may be fraught with challenges, but Ghana’s resilience, strategic economic measures, and support from global partners offer a robust foundation for sustainable growth.
Story by: Mercy Addai Turkson #ahotoronline.com
