Ghana’s Economy at a Turning Point: Stability Gains, Bold Reforms, and the Promise of Real Relief for Citizens
As Ghana prepares to enter 2026, the latest national budget paints a picture of an economy clawing its way back from years of turbulence and edging toward a fragile but promising recovery. The 2026 Budget is not only a catalogue of numbers and policy targets—it is also a statement of renewed ambition: to stabilize the macroeconomy, restore public confidence, strengthen fiscal discipline, and deliver tangible improvements to everyday life.
But while the indicators point in the right direction, the real test will be whether these gains matter where it counts most – on the streets, in markets, in homes, and in small businesses across the country.
2025: The Year Ghana Turned the Corner
According to the Budget, 2025 was the year Ghana “reached a decisive turning point.” After several years of economic strain, growth finally gathered momentum. GDP expanded by 6.3 percent in the first half of the year—well above the full-year target of 4.8 percent. Non-oil economic activity strengthened too, thanks to renewed private sector confidence and stronger performance in agriculture and services.
Perhaps the biggest story of the year was inflation. After peaking at 23.8 percent at the end of 2024, inflation tumbled to 8 percent by October 2025, returning the country to single-digit inflation for the first time in four years. Food inflation moderated to 9.5 percent and non-food inflation dropped to 6.9 percent.
With inflation cooling, the Bank of Ghana cut its policy rate by a dramatic 650 basis points, bringing it to 21.5 percent. This was a signal to the market that the era of runaway inflation and emergency tightening might finally be over.
External conditions also improved. Ghana’s gross international reserves climbed to nearly five months of import cover, and the cedi enjoyed a rare period of stability—recording modest appreciation while volatility eased.
Fiscal Discipline Returns and It Shows
On the fiscal front, 2025 was a year of consolidation. The government posted a primary surplus of 1.5 percent of GDP and kept the overall fiscal deficit to a projected 2.8 percent of GDP on a commitment basis. Tight expenditure controls helped reduce domestic borrowing, while improved revenue supported the consolidation effort.
This performance created a foundation for what government hopes will be a sustained rebuilding of fiscal credibility.
2026: Ambitious but Grounded Macroeconomic Targets
The 2026 Budget sets out a cautious but hopeful set of macroeconomic ambitions.
- Real GDP growth: 4.8%
- Non-oil GDP growth: 4.9%
- End-year inflation: 8% (maintaining single-digit stability)
- Primary balance: +1.5% of GDP
- Gross reserves: ≥ 3 months of import cover
These indicators suggest that policymakers are betting on continued stability, steady disinflation, and structural reforms to keep the economy on track.
The fiscal framework reflects similar discipline: total revenue and grants are expected to reach 16.8 percent of GDP, with primary expenditure at 15.3 percent. This supports another primary surplus of 1.5 percent and an overall deficit of 2.2 percent of GDP on a commitment basis.
In an era where Ghana is under IMF supervision and debt restructuring remains a reality, these targets are not just numbers – they are political commitments.
A Mixed but Hopeful External and Sectoral Outlook
The external sector is expected to remain stable in 2026, with at least three months of import cover. Export earnings should benefit from stronger gold and cocoa receipts and a modest revival in oil output. Ongoing foreign exchange reforms are expected to deepen transparency and bring more predictability to the currency market.
Sectoral growth will continue to depend on three key pillars:
- Agriculture: more irrigation, mechanisation, and implementation of the Agricultural Transformation Agenda.
- Industry: recovery supported by new oil field developments and improved energy reliability.
- Services: expected to remain the largest sector, boosted by digital expansion and job creation.
Global growth of 3.7 percent and ECOWAS regional growth of 4.4 percent also shape the external assumptions underpinning the projections.
But Will Ghanaians Feel the Gains?
Despite the upbeat macroeconomic narrative, one question lingers: when will ordinary citizens feel the difference?
Inflation may be dropping, but prices remain painfully high due to the steep increases experienced in previous years. Lower inflation slows the rate of price increases—it doesn’t reverse them. For market women, trotro drivers, teachers, or small shop owners, the burden of elevated price levels remains heavy.
Similarly, stable reserves and a calmer exchange rate are promising signs, but these gains remain abstract unless they translate into lower transport costs, more affordable food, and cheaper loans. Households will only feel the recovery when interest rates come down decisively, essential goods become more affordable, and job opportunities expand.
The challenge is clear: Ghana needs not just macroeconomic stability, but microeconomic relief.
Socio-Economic Pressures That Still Demand Attention
Even as the numbers improve, several underlying socio-economic issues remain critical:
- Employment creation: Growth is rising, but job creation—particularly for the youth—lags. Capital-intensive sectors like oil will not absorb enough labour.
- Real incomes remain squeezed: Disinflation has not restored the purchasing power lost during previous price surges.
- High lending rates: Despite cuts to the policy rate, commercial lending rates remain stubbornly high, limiting SME expansion.
- Food security risks: Agriculture still faces climate shocks, high input costs, and logistics bottlenecks.
- Fragile FX stability: Sustaining cedi stability requires discipline, export growth, and tight management.
- Social protection gaps: Vulnerable groups still need stronger support systems to withstand economic shocks.
- Tax fairness: Broadening the tax net remains essential to avoid overburdening compliant taxpayers.
- Service delivery expectations: Stable macro indicators must translate into better roads, reliable energy, improved healthcare, and stronger education.
These issues will largely determine whether stability feels real beyond the fiscal tables.
A Bold Reform: The Value for Money Office
One of the standout announcements in the 2026 Budget is the creation of a Value for Money Office (VMO)—an independent institution designed to ensure every public cedi delivers real value. Analysts have described it as potentially transformative, but only if its independence is fully protected.
The VMO aims to end waste, corruption, and inefficiencies across government spending by certifying major public projects, enforcing national cost benchmarks, demanding measurable results, and publishing performance reports for citizens and Parliament.
This reform comes at a critical time. IMF assessments estimate that corruption-prone procurement practices cost Ghana up to US$3 billion annually. A strong, independent VMO could plug these leaks, free funds for infrastructure, and slow the growth of public debt.
But experts warn that the initiative will succeed only if it is insulated from political influence. A VMO that cannot act freely cannot deliver the accountability Ghana urgently needs.
Tax Reforms: Returning GHS 5.7 Billion to the Economy
Tax reform remains central to Ghana’s economic management strategy. After removing several nuisance taxes in the 2025 Budget—including the E-Levy, betting tax, emission levy, and VAT on motor insurance—the 2026 Budget introduces another wave of reforms aimed at easing compliance and boosting economic activity.
Key measures include:
- Abolition of the COVID-19 Levy
- Reduction of the effective VAT rate from 21.9% to 20%
- Raising the VAT registration threshold from GHS 200,000 to GHS 750,000
- Removing VAT on mineral exploration
- Extending the 0% VAT rate on locally manufactured textiles to 2028
The reforms, valued at GHS 5.7 billion, are designed to return money to households and businesses, stimulate production, and strengthen the competitiveness of local industries.
By reintegrating the GETFund and NHIL levies into the VAT base, businesses can now reclaim input VAT fully, reducing costs and improving profitability. Government hopes to complement these reforms with digital tools such as Fiscal Electronic Devices, a VAT Reward Scheme, and e-commerce VAT tracking to enhance compliance and secure revenue.
Yet challenges remain, including the risk of revenue shortfalls, uneven distribution of benefits, administrative hurdles, and inflationary pressures if demand rises faster than supply.
A Recovery With Promise and a Long Road Ahead
The 2026 Budget signals a country steadily finding its footing again. Growth is rising, inflation is stabilizing, fiscal discipline is returning, and structural reforms are gaining momentum. Yet for many Ghanaians, the recovery will only feel real when prices fall, wages stretch further, jobs become more available, and public services improve.
Stability, on its own, is not enough. The true success of Ghana’s economic turnaround will be measured not just in macroeconomic figures, but in the everyday experiences of its people.
And that remains the challenge and opportunity of 2026.
This feature was authored by Ebenezer Neequaye l Isaac Tsigbey l Winston Tackie l Dodoo, Fuaad.
The feature follows a one-day workshop training for journalists on the 2026 budget by the Africa Centre for Energy Policy (ACEP).
