The Republic of GHANA: Economic Perspectives

Since 2017, Ghana has always been one of the tenth fastest growing African economies. However, in 2020, following the falling of oil prices and the Covid-19 crisis, the country’s economy was in recession. Ghana’s GDP growth rate decreased from 6.5% in 2019 to 0.9% in 2020.

Besides, recurring power cuts have led the Ghanaian government to launch an energy diversification strategy, increasing the share of renewable energies and building nuclear power plants. A long-term project which is digging more and more the country’s budget deficit.

The IMF expects GDP growth to rebound to 4.6% in 2021 and 6.1% in 2022, subject to the post-pandemic global economic recovery.

  • The Primary sector accounts for 3% of the country’s GDP and employs up to 30% of the workforce. Arable lands cover 57% of the total land area of the country (FAO). 95% of the cultivated land is made up of small and medium-sized farms (up to 10 hectares). The main crops of the country are tree crops, cocoa, oil palm, coffee and rubber (southwest), maize, legumes, cocoyam and tobacco (middle-belt of the country), sorghum, millet, cowpeas and peanuts (north). The agricultural sector remained resilient during the pandemic.
  • The Industrial Sector contributes to 32% of GDP and barely employs 21% of the working population. The country’s industrial sectors are mainly export oriented: petroleum, mining (Gold, bauxite, and manganese), logging, light manufacturing, aluminum smelting, food processing and cement production. Ghana has a developed auto industry, and it exports cars to other African countries. The manufacturing and oil sectors were the most affected during the pandemic.
  • The Tertiary Sector contributes to 1% of GDP and employs about 49% of the total working population. It is driven by the Banking sector which has grown and modernize in recent years. Telecommunications remain the main service sector during the pandemic due to the rapid growth of mobile phone users and the mobile payment technologies.

With 31 million inhabitants, the 12th most populous country in Africa, Ghana is the continent’s 9th richest country with an estimated GDP of USD 68.5 Billion in 2020. Despite Ghana’s strong performance in terms of economic growth, the country faces high inequalities, poverty, and unemployment. In 2020, the country is ranked 138th in Human Development Index. The unemployment rate is estimated around 4.5% (World Bank).

Population (2020 UN)32.51 million inhabitants
GDP / Capita USD (2021, IMF)USD 10.0
HDI (2020, UNDP)79th over 190
Doing Business (2020 World Bank rank) 75th over 190
Corruption Perceptions Index 202136h over 180
Unemployment rate (FMI 2021)9.7%

On a Demographic point on view, about 3 million people live in the capital Accra and 56.7% of the population live in urban areas. Demographic growth rate is at 2.2% in 2020 (UN). 71.2% of the population are Christians, 17.6% are Muslims, 5.2% have traditional beliefs and 5.3% are atheists. Density is at 131 inhabitants per Km², and literacy rate reaches 79.4% of the population.

On a Political point on view, in 2016, Nana Dankwa Akufo-Addo was elected President of the Republic. He beats the outgoing president with 53.7% of the vote and a 70% turnout. He was reelected in 2020 still facing John Dramani Mahama. Since his election in 2016, President Akufo-Addo has mainly focused his program on the economic development of Ghana : industrialization “One District One Factory”, education “Free Secondary High School”…

On an Economical point of view, in 2020, the Ghanaian economy suffered from the collapse in oil and cocoa export revenues (representing almost 30% of its exports). To fight the consequences of the pandemic, the government integrated the “Coronavirus Control Program”, worth 3% of GDP.

Therefore, the country’s public accounts have deteriorated in 2020:

  • Debt increased from 63.9% of GDP to 78% of GDP
  • The level of public debt is expected to remain high, 81.5% of GDP in 2021, 83.2% of GDP in 2022
  • Ghana is thus classified at high risk of debt distress (IMF).

The Covid-19 crisis has dug a debt partly due to exceptional energy and financial costs. Ghana’s arrears to the energy sector represent 1% of GDP each year (Coface). However, the government remain committed to its energy sector recovery program (2019 to 2023) implemented in collaboration with the World Bank.

To face financial needs, the government was forced to give up the fiscal rule it has introduced in 2018, capping the budget deficit at 5% of GDP. Budget deficit is estimated at -15% of GDP in 2020 (Coface). Ghana has also benefited from a disbursement of USD 1 Billion from the IMF to meet its budgetary and balance of payments needs.

Economic Indicators201920202021e2022e 2023e
GDP ($ Billion current price)230.87205.46225.86231.69246.72
GDP growth (%)2.2-
Inflation rate (%)
Public debt (% GDP)
Current balance (% GDP)-

Bank of Ghana (BOG)

In 2020, the partial monetization of the deficit fueled inflation, which rose to 9.9% vs 7.1% in 2019. The IMF expects inflation to remain high in 2021 (9%) and 2022 (8.2%). To revive the economy and attract investment, with the agreement of monetary authorities, the Covid-19 Support for Business Relied and Revitalization (CARES) initiative was adopted, a GHS 100 Billion program over 2020-2023 funded at 30% by the government. The BOG also decreased its Policy Rate to 13.5%, 1% above its historical low level, to help the economy recover from the pandemic consequences.


Focus on Exports and Imports

In 2019, Ghana was the number 73rd economy in the world in terms of GDP (current US$), the 72nd exporter in the world and 81st importer in the world. The country exported USD 21.7 Billion and imported USD 18.4 Billion, resulting in a positive trade balance of USD 3.3 Billion.

The top exports of the country are Gold ($10.8B), Crude Petroleum ($4.68B) and Cocoa Beans ($1.61B), Cocoa Paste ($504M) and Manganese Ore ($489M). Ghana exports mostly to Switzerland ($4.92B), India ($3.62B), China ($2.67B), United Arab Emirates ($1.83B), and South Africa ($1.72B).

The top imports are Flexible Metal Tubing ($2.11B), Scrap Vessels ($1.03B), Special Purpose Ships ($655M), Cars ($496M) and Refined Petroleum ($471M). It imports mostly from China ($4.35B), Nigeria ($4.04B), United States ($924M), United Kingdom ($757M), and India ($637M).


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