World Bank Says Ghana’s Economy Showing Resilience Amid a Challenging Environment
The World Bank’s 9th Economic Update for Ghana titled Addressing Labor Market Challenges and Opportunities in Ghana’s Economic Landscape notes Ghana’s economy displayed resilience with strong growth of 5.7 percent in 2024 and continued growth in the first quarter of 2025 of 5.3 percent.
The Update also highlights Ghana’s notable progress towards completing its debt restructuring, subsiding inflation, and strong reserve accumulation supported by robust trade performance. Notwithstanding, fiscal challenges emerged in 2024, which undermined previous fiscal stabilization gains.
These also underscore the need for renewed efforts to implement structural reforms aimed at reinforcing fiscal discipline and macroeconomic stability.
The report anticipates that GDP growth will moderate to 3.9 percent in 2025 due to the impact of fiscal adjustments on domestic demand, persistent inflation which is higher than the single-digit target, and high interest rates, before gradually returning to a projected level of 5 percent over the medium term. The report emphasizes that significant risks could undermine Ghana’s macroeconomic stability and growth prospects.
These include delays in completing external debt restructuring and challenges in fiscal consolidation, compounded by global factors such as international conflict escalations and commodity price volatility.
Domestically, inflationary pressures and exchange rate volatility pose threats, along with potential losses from state-owned enterprises (SOEs) and lower agricultural output due to climate shocks. The report notes that effectively managing election-related extra budgetary in future elections will be crucial in maintaining fiscal sustainability.
“Ghana’s success will depend on maintaining reform momentum and steadfast implementation. Entrenching fiscal discipline, strengthening public financial management, and carefully managing inflation and exchange rate volatility will be key. Energy sector reform, including through private sector participation, is urgent to improve management effectiveness and the collection of energy revenues,” said Robert Taliercio, Division Director for Ghana, Liberia and Sierra Leone. “These reforms are needed to restore macro-financial stability to support economic transformation and sustainable growth for jobs.”
The report underscores the need for structural reforms to support a private-led growth and job creation for Ghana’s growing population. This means improving the business environment, closing infrastructure gaps, and accelerating the digital economy and climate adaptation.
It notes the importance of addressing energy and cocoa sector challenges to mitigate fiscal risks and bolster economic stability. Building human capital and enhancing the efficiency of service delivery are key to creating a productive labor force.
Ghana’s working-age population is projected to increase significantly over the next decade, presenting a major opportunity for economic growth if the expanding labor force can be absorbed into productive employment.
Under this special topic, Addressing Labor Market Challenges and Opportunities, the report underlines the importance of developing a comprehensive strategy on job creation, structural transformation, and skill development.
“A key focus should be on youth and their transition from school to work, ensuring they have the skills needed for a modern economy to provide strong employment opportunities, essential for realizing the demographic dividend,” said Kwabena Gyan Kwakye, Economist and lead author of the Economic Update.
“Job-to-job transitions are also crucial, allowing workers to move into more productive and sustainable employment, whether through geographic or sectoral shifts or within the same firm. Agriculture remains a key sector for in-situ productivity improvements, offering pathways to boost productivity and resilience through strategies like agro-processing value chains and out-grower schemes”, he added.
The report stresses the importance of addressing the barriers to private sector growth in productive sectors to enhance productivity and support economic transformation. Addressing regulatory inefficiencies, trade obstacles, and inadequate infrastructure has significant potential to boost export growth and job creation especially in Ghana’s manufacturing sector— particularly textiles, electronics, and chemicals.
The report recommends three main policy avenues to attract private capital and create jobs.
- Building Physical and Human Capital:Infrastructure investments in irrigation, transportation, and energy are crucial for Ghana’s business operations and market connectivity. The government should allocate resources to critical infrastructure and strategically engage private capital via public-private partnerships, recognizing constraints in domestic revenue streams. Moreover, improving the quality of education and investing in workforce skills are essential to prepare workers for a changing labor market.
- Improving the Enabling Environment:The removal of structural constraints that limit firm growth and value chain integration is critical to expanding the private sector and essential for job creation. Key reforms required include addressing insolvencies, land registries, and access to finance.
- Mobilizing Private Capital:Job creation hinges on unlocking private investment in sectors with potential for scale and productivity gains. This involves increasing access to finance, supporting entrepreneurship, and utilizing risk management instruments that encourage investment in underserved regions. Long-term reforms to reduce political and country risks are necessary to foster private sector partnerships.
