Ghana’s mid-2026 economic outlook based on Bank of Ghana summary of economic and financial data released March 17, 2025: What policymakers should do?
Ghana enters the first quarter of 2026 from a position of notable macroeconomic recovery. Inflation has fallen sharply, international reserves are at historic highs, growth remains robust, and the financial sector is stabilising.
These gains reflect disciplined monetary and fiscal policy, external support, and improving confidence. Yet, beneath this progress lies a set of emerging risks that require decisive and forward-looking policy action. The task before policymakers is not to celebrate stability, but to consolidate it and convert it into durable, inclusive growth.
The current economic trend suggests a transition phase. Inflation, which declined to near 3.3 per cent in February 2026, is unlikely to remain at that level. Rising global oil prices, exchange rate pressures, and the fading of favourable base effects will push inflation upward toward the 5–7 per cent range by the second half of the year. Growth will remain relatively strong, supported by services and private sector credit expansion, but momentum will weaken as cocoa incomes decline and energy costs rise. Meanwhile, the external sector—though supported by strong reserves—faces a narrowing surplus due to lower cocoa export earnings and higher import bills. These dynamics define the policy environment mix of stability and vulnerability[ Note: The full report may be obtained upon request to
Against this backdrop, policymakers should act decisively across five critical areas.
First, macroeconomic assumptions must be continuously updated and aligned with reality. Economic management cannot rely on outdated projections. Oil prices, cocoa revenues, exchange rate expectations, and inflation dynamics have shifted significantly. Policymakers must adopt a more adaptive framework—one that regularly changes projections and incorporates downside scenarios. This strengthens fiscal credibility and enhances investor confidence. Without realistic assumptions, even well-designed policies will fail in execution.
Second, GRA should aggressively mobilise domestic revenue. The country’s tax-to-GDP ratio remains structurally low at 13.1 per cent of GDP while comparator economies at similar income levels typically achieve 18–22 per cent of GDP, limiting fiscal space. Policymakers should prioritise broadening the tax base rather than increasing rates. This includes reducing tax exemptions, strengthening VAT compliance through digital systems, and expanding taxation within the informal sector. Property taxation, particularly in major urban centres, offers a largely untapped and stable revenue source. A credible medium-term goal should be to raise tax revenue by at least 1.5 percentage points of GDP within two years. This is both achievable and necessary to finance development sustainably.
Third, public expenditure must shift toward productivity-enhancing investments. Capital expenditure has been persistently low at 1.4 of GDP, undermining long-term growth. Policymakers must prioritise infrastructure—especially in energy, transport, irrigation, and digital connectivity. Increasing capital spending is not merely a fiscal decision; it is a growth strategy. At the same time, expenditure efficiency must improve. Leakages, poorly targeted subsidies, and rigid recurrent spending continue to weaken fiscal outcomes. Every cedi spent should be linked to measurable economic returns.
Fourth, targeted interventions are needed in critical sectors, particularly cocoa and energy. The sharp decline in global cocoa prices poses a direct threat to rural livelihoods and agricultural output. Policymakers must introduce temporary but well-targeted support for coacoa farmers, including input subsidies and income stabilisation mechanisms. This is not only a social imperative but also an economic one, given cocoa’s role in exports and employment.
In the energy sector, rising oil prices as a result of Iran War create a difficult policy trade-off between inflation and fiscal stability. Full subsidy is fiscally unsustainable, while full pass-through risks inflation and social discontent. Policymakers should adopt a balanced approach—partial pass-through combined with targeted support for vulnerable groups and key sectors such as transport. Importantly, any subsidy framework must be transparent, rules-based, and time-bound.
Fifth, policymakers should strengthen their external resilience and reduce structural vulnerabilities. The current dependence on gold and cocoa exports exposes the economy to commodity price shocks. Policymakers must accelerate export diversification by supporting agro-processing, manufacturing, and services exports. This requires coordinated policies—access to finance, infrastructure support, and trade facilitation. At the same time, reserve management should become more transparent and strategic, ensuring that buffers are preserved and used effectively.
Debt management also remains central. Extending the maturity profile of domestic debt and reducing rollover risks should be prioritised. Deepening the domestic capital market will support this objective while providing long-term financing options for the government and the private sector.
Finally, financial sector stability must not be taken for granted. While the banking sector has strengthened, non-performing loans remain elevated. Policymakers should implement a structured framework for resolving distressed assets, improving credit discipline, and restoring full lending capacity. A healthy financial system is essential for sustaining private sector-led growth.
In sum, Ghana’s Mid-2026 economic outlook is broadly positive but increasingly complex. The country has achieved stability, but that stability is not self-sustaining. It requires deliberate policy choices, disciplined execution, and a clear focus on structural transformation. The priority now is to move beyond short-term stabilisation and build a resilient, diversified, and inclusive economy.
