The African Development Bank (AfDB) recently updated its economic forecasts for Ghana, raising the growth rate to 3.4% for 2024, up from a previously predicted 2.8%. For 2025, the growth expectation is even higher at 4.3%. This positive adjustment reflects a more robust economic outlook for Ghana than initially expected earlier in the year.
The expected acceleration in growth is attributed to the strong performance anticipated in the industrial and services sectors. These sectors are likely to benefit from an increase in private consumption and investment, signaling a healthy economic environment. With these revised figures, Ghana is expected to rank ahead of Nigeria, placing it 14th in West Africa for the strongest Gross Domestic Product (GDP) growth.
However, the economic outlook isn’t without its challenges. Factors such as the ongoing fiscal consolidation under the Post-Covid Programme for Economic Growth, the residual impacts of Russia’s invasion of Ukraine, and limited access to finance and foreign exchange are potential hurdles. Additionally, global macroeconomic shocks could pose risks to the growth trajectory. Nevertheless, the AfDB suggests that these risks could be mitigated through prudent macroeconomic management policies.
The AfDB has emphasized the need for Ghana to boost its economic competitiveness to ensure sustainable growth. It pointed out that productivity in the services sector, which is the dominant employment sector, has stagnated and is only slowly increasing in the industrial and agricultural sectors. From 2007 to 2019, the employment share in agriculture dropped from 53.9% to 29.8%, while the industry’s share increased from 14.1% to 21.0%, and services rose from 31.9% to 49.2%. To accelerate structural transformation, Ghana is encouraged to ease infrastructure bottlenecks, enhance agro-industrialization through better skills development, increase value addition, bolster private sector development, and create a conducive policy framework for technology adoption and innovation.
In the broader West African context, economic growth is also expected to strengthen. The region’s growth is projected to rise from an estimated 3.6% in 2023 to 4.2% in 2024, with further consolidation at 4.4% in the following year. This upgrade reflects stronger anticipated economic activity in major economies like Côte d’Ivoire, Ghana, Nigeria, and Senegal. By 2025, real GDP growth in Africa is projected to surpass the rates seen in 2022, driven by significant gains across various regions, including East, Southern, and West Africa. A total of 40 countries are expected to post higher growth rates in 2024 compared to 2023, and the number of countries achieving a growth rate of more than 5% is set to increase to 17.
