Ghana’s economic recovery is showing encouraging signs, with stronger growth, lower inflation and improved fiscal balances, but rising pressure on the cedi, future debt repayments and increasing domestic costs could test the country’s stability following the end of its International Monetary Fund (IMF) financing programme.
According to SIC Brokerage’s third-quarter macroeconomic review, Ghana’s economy grew by 6 per cent in the second quarter of 2026, while inflation declined to 5.2 per cent in September. The country also recorded a primary surplus of 1.4 per cent of Gross Domestic Product (GDP) between January and July.
These developments point to significant progress following the economic difficulties of recent years. However, the report cautions that maintaining the gains could prove more challenging as the country moves beyond IMF financial support.
Ghana completed its US$3 billion Extended Credit Facility programme in July after receiving a final disbursement of approximately US$371 million. The country has since transitioned to a 36-month Policy Coordination Instrument, which provides continued IMF monitoring and policy guidance without additional financing.
The transition means the government must sustain fiscal discipline without the support of fresh IMF disbursements tied to programme reviews. So far, the fiscal figures have remained encouraging, with the overall deficit standing at 0.2 per cent of GDP by July, below the programme target of 1.9 per cent.
However, the report raises concerns about how the government has achieved its fiscal gains. Although revenue met the second-quarter target of GH¢65.9 billion, expenditure stood at GH¢63.3 billion, significantly below the GH¢74.1 billion budgeted for the period.
Capital expenditure reached 79 per cent of its quarterly target, while arrears clearance achieved only 39 per cent of the planned amount. The figures suggest that part of the improved fiscal position has come from slower-than-planned spending rather than stronger revenue collection alone.
Revenue performance was also uneven. Company taxes exceeded their quarterly target by 24 per cent, supported by strong profitability in the gold sector. However, value-added tax collections fell 11 per cent short of target, excise revenue missed its target by 61 per cent, and oil revenue was 23 per cent below expectations.
Despite these shortfalls, Ghana appears well positioned to meet its key fiscal targets for 2026. The primary surplus recorded by July leaves the government needing only a further 0.1 per cent of GDP to reach its full-year target of 1.5 per cent. The cash deficit ceiling of 4 per cent of GDP also appears achievable.
The longer-term challenge, however, lies in managing upcoming debt repayments. Domestic debt exchange bonds worth GH¢58 billion mature in 2027, followed by another GH¢53 billion in 2028. Although the Sinking Fund held GH¢15.6 billion by late July, against a year-end target of GH¢30 billion, the available funds may not be enough to eliminate refinancing pressures.
Public debt also increased to 45.9 per cent of GDP in July, from 44.7 per cent at the end of 2025. The depreciation of the cedi has contributed to the increase by raising the domestic-currency value of external debt obligations. While Ghana’s debt distress classification has improved to moderate risk, managing the debt trajectory remains important.
Inflation remains one of the clearest indicators of the country’s economic progress. The September rate of 5.2 per cent was significantly lower than the 9.4 per cent recorded a year earlier and remained below the Bank of Ghana’s target range of 6 to 10 per cent.
However, inflation has started rising again after falling to 4.6 per cent in July. It increased to 5 per cent in August and 5.2 per cent in September, driven largely by domestic service costs, including housing, utilities, rent and transportation.
SIC Brokerage describes the trend as a home-grown, services-driven inflation problem, warning that locally generated costs can take longer to ease than prices of imported goods. Higher electricity and water tariffs, expensive crude oil and rising transport costs could continue to put pressure on household budgets and business operations.
The brokerage projects that inflation could end 2026 between 5.5 and 7.5 per cent, with a central estimate of around 6 per cent. It identifies persistently high global oil prices and further depreciation of the cedi as key risks to the outlook.
These concerns have influenced the Bank of Ghana’s monetary policy decisions. The central bank has maintained its policy rate at 14 per cent for three consecutive meetings after reducing it from 27 per cent in January 2025. With inflation at 5.2 per cent, the relatively high real interest rate provides some protection against renewed price pressures and currency instability.
The cedi, however, remains a major vulnerability. After appreciating by approximately 40.7 per cent in 2025, the currency had lost about 9.5 per cent of its value against the US dollar in 2026 by late September, trading at around GH¢11.55 to the dollar.
Gross international reserves also declined from US$12.9 billion at the end of June to US$12.05 billion by September 22.
The currency pressure comes despite strong external trade performance. Ghana recorded a trade surplus of US$8.85 billion in the first eight months of 2026, while first-half gold exports increased by 49 per cent to US$12.5 billion.
According to the review, corporate demand for dollars, offshore transactions, import payments, coupon repatriation and reduced central bank intervention have contributed to the cedi’s weakness despite the country’s strong export earnings.
Economic growth also remains concentrated in a few sectors. Information and communications technology expanded by 30.9 per cent and contributed approximately 41.5 per cent of second-quarter growth, while oil and gas rebounded by 21.4 per cent.
Other sectors recorded more modest performances. Agriculture grew by 3.9 per cent, mining expanded by 2.6 per cent, while fishing contracted by 24.7 per cent.
Ghana could still achieve full-year growth of between 6 and 6.3 per cent, exceeding the government’s target of 4.8 per cent. However, the report suggests that the concentration of growth in ICT, oil production and public investment raises questions about how widely the benefits will be distributed across the economy, particularly in terms of employment and household incomes.
The third-quarter review presents a cautiously optimistic outlook for Ghana. The country has made considerable progress in restoring macroeconomic stability, but sustaining that progress will require stronger revenue mobilisation, disciplined spending, effective debt management and measures to support broader economic growth.
With IMF financing behind it, Ghana now faces the task of demonstrating that its recovery can withstand external shocks, rising domestic costs and mounting refinancing obligations.
The challenge is no longer simply restoring stability, but ensuring that the gains are sustained and translated into broader economic opportunities for businesses and households.
Source: Norvanreport
