KEY POINTS
- Ghana is implementing reforms in the cocoa sector to counter declining production due to environmental and operational challenges.
- Efforts to combat illegal mining are being intensified to prevent environmental degradation and promote sustainable practices.
- Fiscal consolidation and structural reforms are prioritized to address public debt and ensure fiscal stability.
Ghana, a nation rich in resources and cultural heritage, is currently addressing several pressing economic challenges to ensure sustainable growth and development.
Under the leadership of President John Dramani Mahama, who was inaugurated for the third time on January 7, 2025, the government has prioritized tackling these issues to improve the nation’s economic landscape.
Declining cocoa production
Cocoa has long been a cornerstone of Ghana’s economy. However, recent years have seen a significant decline in production due to factors such as climate change, tree diseases, and illegal mining activities.
In the 2023/24 season, Ghana delayed the delivery of 370,000 metric tons of cocoa, marking a two-decade low in output.
To address this, President Mahama has pledged to reform the cocoa sector and restructure the Ghana Cocoa Board (COCOBOD) to enhance efficiency and support farmers.
Illegal mining and environmental degradation
Illegal gold mining, known locally as “galamsey,” has led to severe environmental degradation, including deforestation and water pollution.
The government is intensifying efforts to combat these activities, as evidenced by recent military interventions to halt illegal operations.
Additionally, there is a push for stricter regulations and community engagement to preserve natural resources and promote sustainable mining practices.
Inflation and cost of living
Inflation in Ghanaians is taking its toll with a spike in the cost of living.
Basic commodities have grown much more expensive, according to reports, and have eroded citizens’ purchasing power. To reduce the financial burden on household, the government is pursuing monetary policies to stabilize prices and to curb inflation.
Public debt and fiscal stability
Ghana faces challenges related to public debt and fiscal stability.
The World Bank has noted that a combination of domestic imbalances and external shocks has led to macroeconomic challenges, including currency depreciation and rising inflation.
On these, the government is trying to bring in fiscal consolidation and structural reforms so as to restore economic stability.
Lower economic growth projections
Economic growth projections for Ghana indicate a slowdown, with the economy expected to grow at a rate of 3.6 percent in 2025, down from previous years.
Leadership changes and policy adjustment post election are attributed to this deceleration.
In turn, the government is actively looking for opportunities to spur growth by starting with infrastructure, improving the business environment and other sectors; among them are agriculture and manufacturing.
By proactively addressing these challenges through comprehensive reforms and strategic initiatives, Ghana aims to pave the way for a more resilient and prosperous future.
