Despite a projected gradual increase in Ghana’s GDP growth to around 5% beyond 2024, the International Monetary Fund (IMF) has identified significant downside risks in its latest Country Report. While the report revises Ghana’s 2024 growth projection upward to 4.0% (from 3.1%), it emphasizes several potential threats to this positive outlook. External Risks: The IMF cites escalating regional conflicts and spillovers from the ongoing conflicts in Ukraine and the Middle East as key concerns.
These could exacerbate imported inflation and increase risk aversion among investors. The report also highlights the volatility of commodity prices as a significant risk factor, potentially increasing costs and destabilizing the economy. Climate and Agricultural Challenges: The IMF identifies climate-related risks as a major threat. Prolonged weak cocoa harvests, attributed to adverse weather and disease, could negatively impact exports and overall growth. The report further states, “If protracted, weak cocoa harvest could affect exports and growth prospects. More generally, Ghana is subject to risks related to climate shocks.
On the domestic side, policy slippages ahead of the end-2024 general elections or during the political transition could undermine macroeconomic stability, deteriorate domestic financing conditions and the debt dynamics, and complicate debt restructuring discussions with Ghana’s remaining external commercial creditors.” Inflation and Exchange Rate Volatility: The IMF warns of upward risks to the inflation outlook. Disinflation has proven slower than anticipated, accompanied by increased exchange rate volatility.
The Fund projects inflation to reach 18% by the end of 2024 (up from a previous estimate of 15%), primarily due to pressure from a weakening cedi and ongoing dry weather conditions.
