An overview of Ghana's macroeconomic prospects

Now that the debt restructuring process has entered its final stages and the elections are behind, the new government can focus on delivering fiscal reforms and policies to re-anchor inflation.President Mahama’s government pledged to turn around the budget; the Finance Minister aims to achieve a 1.5% of GDP primary fiscal surplus in 2025¹ (not including interest payments) following a deep primary deficit of 1.2% of GDP in 2024². Budgetary figures in 1Q25 evidence that the government had started the consolidation, but there is still work to be done to ensure that the fiscal consolidation remains on track.

While the government is working on budgetary reforms, the Bank of Ghana (BoG) will play an important role in safeguarding the orderly functioning of the local money, debt and FX markets. The BoG delivered a 100bp policy rate hike to 28%³ in March 2025 and kept the rate stable in May to bolster investor confidence as well as to ensure that disinflation continues (inflation was 18.1% yoy in May)⁴. The BoG delivered additional monetary policy measures aiming to improve the monetary transmission mechanism. While the fiscal and monetary policy decisions work their way through the economy, the BoG will most likely keep the policy rate stable. We do not expect a policy rate cut before 4Q25.

In the interim period until the BoG can confidently start a monetary easing cycle, non-resident investors will scrutinise Ghana’s external position in addition to domestic economic developments. From an external standpoint, the current account amassed a sizable surplus of USD 2.1bn in 1Q25⁵, which supported the BoG’s efforts to build reserves. Net reserves increased to USD 7.9bn in April 2025⁶ (vs USD 3.1bn in December 2023⁷). It is also encouraging that Ghana continues to actively engage with the IMF under its existing programme⁸. Both the current account and the programme with the IMF should be perceived positively by investors. In our opinion, the key to credit rating upgrades and long-lasting improvement in non-resident investors sentiment towards Ghanaian assets is a credible and sustainable fiscal trajectory in addition to the improving external position.

Gergely Urmossy, Director, Senior Frontier Markets Strategist, Societe Generale Corporate Investment Banking (SG CIB)

¹ Ministry of Finance Ghana, 2025 Budget Statement and Economic Policy, p.51, 2025-Budget-Statement-and-Economic-Policy.pdf
² Ministry of Finance Ghana, 2025 Budget Statement and Economic Policy, p.23, 2025-Budget-Statement-and-Economic-Policy.pdf
³ Bank of Ghana, 2025, Monetary Policy Committee Press Release, p.2, MPC-Press-Release-May-2025.pdf
⁴ Ghana Statistics Office, 2025, CPI presentation, p.5, 03-May 2025 CPI-PPT-Final-4Jun25.pdf
⁵ Bank of Ghana, 2025, Summary of Economic and Financial Data, p.7, Summary-of-Economic-and-Financial-Data-May-2025.pdf
⁶ Bank of Ghana, 2025, Summary of Economic and Financial Data, p.7, Summary-of-Economic-and-Financial-Data-May-2025.pdf
⁷ Bank of Ghana, 2025, Summary of Economic and Financial Data, p.7, Summary-of-Economic-and-Financial-Data-May-2025.pdf
⁸ International Monetary Fund, 2025, IMF Reaches Staff-Level Agreement on the Fourth Review of the Extended Credit Facility with Ghana, IMF Reaches Staff-Level Agreement on the Fourth Review of the Extended Credit Facility with Ghana