Keypoints:
- Ghana posts fiscal surplus and GDP growth
- Cedi rebounds strongly under Mahama
- Policy reforms target jobs, health, exports
GHANA’S economy has entered a decisive phase of recovery, driven by structural reforms, policy discipline, and targeted investments, according to the 2025 Mid-Year Fiscal Policy Review delivered to Parliament by Finance Minister Dr. Cassiel Ato Forson on July 24.
Just over six months into President John Mahama’s administration, the government says it has reversed much of the economic distress it inherited in January — a crisis defined by runaway debt, IMF programme failure, currency collapse, and eroded investor confidence.
‘We made the conscious decision not to make excuses, but to reset our country,’ Forson told lawmakers. ‘We are restoring macroeconomic stability, restoring public trust, and rebuilding the foundations of inclusive growth.’
From collapse to credibility
Forson’s remarks detailed the scale of the economic damage inherited by the Mahama administration. These included a derailed IMF programme, a public debt-to-GDP ratio exceeding 93 percent, over GHS67bn in arrears, and more than GHS194bn in unauthorised contract commitments.
The cocoa and energy sectors were mired in debt, with liabilities of GHS32bn and financing gaps of over $1.5bn, respectively. Ghana’s currency had depreciated by nearly 19 percent in 2024 alone, making it the world’s worst performer.
But the new government, Forson said, focused on a coordinated reset: reviving policy dialogue through a national economic forum, re-establishing inter-agency coordination between the Finance Ministry and Bank of Ghana, and prioritising fiscal responsibility.
Key among these reforms was the establishment of the Ghana Gold Board to accumulate forex reserves and support cedi stability. A new Revenue Assurance Strategy was also launched to tighten compliance and widen the tax net.
The 2025 budget, delivered in March, reoriented spending towards human development, infrastructure, and production, while keeping deficits in check.
Cedi rebound and fiscal performance improve outlook
The reforms have begun to yield results.
Ghana recorded a primary budget surplus of 1.1 percent of GDP by mid-2025 — well above the IMF-backed target of 0.4 percent — and slashed its overall deficit to 0.7 percent, less than half the expected 1.8 percent.
Inflation declined from 23.8 percent in December 2024 to 13.7 percent in June 2025, and interest rates on treasury bills fell by over 1,300 basis points, easing financing conditions across the economy.
The cedi appreciated by 42.6 percent against the US dollar, with similar gains against the euro and pound — marking the strongest performance in six decades. International reserves rose to $11.12bn, equivalent to 4.8 months of import cover.
Fitch Ratings upgraded Ghana’s sovereign credit rating to B- with a stable outlook in June. The IMF has also approved its fourth programme review and disbursed a further $367 million.
Growth picks up across sectors
Ghana’s real GDP expanded by 4.9 percent in the first quarter of 2025 — outperforming the IMF’s projection of 3 percent. The recovery was broad-based across both oil and non-oil segments. The oil sector grew by 6.8 percent, while the non-oil economy expanded by 4.6 percent.
Agriculture registered robust growth of 6.4 percent, up from 4.8 percent a year earlier. Industry output rose by 5.4 percent compared to 3.8 percent in 2024, and the services sector — Ghana’s largest — grew by 4.3 percent, a significant jump from the previous year’s 2.6 percent.
‘We are seeing the early benefits of our renewed national priorities and the strong leadership of President Mahama,’ Forson said.
Debt restructuring and external balance stabilise
Ghana has completed the restructuring of $5.4bn in bilateral debt under the G20 Common Framework and signed a Memorandum of Understanding with its official creditors. Negotiations with commercial creditors are ongoing and are expected to conclude within IMF programme limits.
The country’s debt-to-GDP ratio dropped from 93.5 percent to 84.9 percent in just six months — the result of deliberate fiscal consolidation, currency appreciation, and renewed reserve buffers.
Meanwhile, the current account balance posted a surplus of 0.8 percent of GDP at mid-year, compared to a 1.1 percent deficit during the same period in 2024. This was driven by stronger export performance, lower import pressures, and a recovery in remittances. Foreign direct investment is also picking up again, according to Forson.
Investment in people: social protection, education, health
Despite tight fiscal space, the Mahama administration has prioritised investments in human capital. In the education sector, the government has re-engaged stakeholders on reforming the Free SHS policy to ensure sustainability, equity, and quality. It has restored teacher trainee allowances, expanded classroom infrastructure at both the basic and secondary levels, and begun the recruitment of more teachers to reduce class sizes and improve learning outcomes.
In the health sector, nurses’ trainee allowances have been restored, and recruitment of health workers has begun to address staffing shortages in CHPS compounds and district health centres. More than 55 previously stalled hospital and clinic projects are being revived, with an added focus on community-based preventive healthcare.
The revised Planting for Food and Jobs 3.0 initiative is also being implemented, with new support for smallholder farmers, improved distribution of seeds and fertiliser, enhanced irrigation schemes, and value chain development to reduce post-harvest losses and improve national food security.
Jobs and competitiveness at the core
The Mahama administration is rolling out two flagship employment initiatives. The 24-Hour Economy programme aims to expand Ghana’s productive hours and shift the economy toward around-the-clock operations in manufacturing, services, and logistics. Incentives will be provided to businesses that open second and third shifts, with the goal of creating decent jobs, particularly for youth.
Meanwhile, the Jobs and Economic Empowerment Programme (JEEP) has begun providing vocational skills training, apprenticeships, and start-up support to thousands of unemployed young people. Other job creation efforts include the expansion of rural public works schemes, the promotion of green and care-economy jobs, and tailored financial support to micro, small, and medium-sized enterprises.
Policy priorities for second half of 2025
Looking ahead, Forson said the government’s focus will be on concluding external debt negotiations, introducing a new Fiscal Responsibility Act to impose tougher limits on borrowing and spending, and deepening public financial management reforms.
The government will also accelerate financial sector reforms to lower interest rates and improve credit access, launch the Accelerated Export Development Programme to expand non-traditional exports, and scale up infrastructure investments in transport, energy, water, and affordable housing.
Climate resilience and green economic transition will also be prioritised, with new funding frameworks for adaptation and emissions reduction being developed in line with Ghana’s commitments under the Paris Agreement.
‘We are doing more with less — through better prioritisation, curbing waste, and fighting corruption,’ Forson said.
‘We inherited a crisis. But through strategic leadership, inclusive dialogue, and disciplined implementation, we are turning the page,’ he added.
