Ghana’s Economic Stabilization in 2024: Perspectives on Recovery

As of 2024, Ghana’s economy is showing signs of recovery, with GDP growth at 3.2% and declining inflation. The IERPP refutes claims of an economic crisis, asserting improvements due to previous administrations’ policies. Former Finance Minister Dr. Mohammed Amin Adam echoes these sentiments, highlighting the robust reserves left behind. President Mahama, however, warns of ongoing hardships and calls for significant reforms to stabilize the economy further.

By 2024, Ghana’s economy exhibited visible signs of stabilization, as per the Institute of Economic Research and Public Policy (IERPP). This policy think tank challenged President John Dramani Mahama’s claims regarding an economic crisis, asserting that the previous administration had successfully averted such a situation. They declared, “Ghana is not in an economic crisis as of 2024 but remains in a recovery phase.”

The IERPP highlighted that Ghana’s Gross Domestic Product (GDP) growth had increased to 3.2% thanks to a resurgence in cocoa production and favorable global cocoa prices. Furthermore, inflation rates dropped to 22.8% in the second quarter of 2024, and the exchange rate stabilized between GH₵12 to GH₵13 per USD. The stabilization of debt levels at 75%-80% of GDP coincided with the continuation of the IMF program.

In terms of fiscal advancements, aggressive reforms significantly reduced public debt from 92.4% to 75%-80% of GDP. These developments mitigated default risks while inflation control efforts resulted in a decline from 54.1% in 2022 to 15% in 2024, with food inflation also receding. By improving foreign reserves, which are sufficient for 3.5 months of imports, the cedi demonstrated renewed stability and investor confidence.

IERPP noted that economic diversification had lessened reliance on oil, with growth driven by non-oil sectors such as ICT and agribusiness. Furthermore, social programs like the LEAP initiative and the Free SHS plan helped vulnerable groups cope with austerity, while fiscal discipline under the IMF framework had successfully narrowed the deficit. These collective advancements highlight Ghana’s transition from crisis management to careful economic stabilization.

Despite the severe challenges faced in 2022 and 2023, the current state indicates a turning point in 2024. Inflation is decreasing, growth is expanding, and the cedi is stable, though issues such as youth unemployment and public debt remain pertinent. The advancements facilitated by structural reforms, support from the IMF, and commodity gains have collectively set Ghana on a recovery trajectory, countering the assertion of an ongoing crisis.

Supporting these claims, Former Finance Minister Dr Mohammed Amin Adam emphasized that economic growth has resurged contrary to President Mahama’s assertions. He cited that the preceding administration had left gross international reserves of $8.9 billion, which the current government is utilizing to bolster the cedi. Dr. Amin Adam accused President Mahama of propagating misleading claims during his State of the Nation Address.

During his address, President Mahama expressed concerns regarding the dire state of the nation’s economy and the resultant hardships faced by citizens. He called for immediate strategies to ameliorate the economic decline while emphasizing the necessity of bold reforms to restore stability for households and businesses.

Overall, the contrasting narratives surrounding Ghana’s economic state reflect significant perspectives on the progress achieved since 2022. While the IERPP and former officials point to recovery, President Mahama’s address underscores the urgency of addressing ongoing challenges actively.

In conclusion, Ghana’s economic landscape in 2024 indicates positive signs of recovery, with GDP growth, declining inflation, and stabilization of the cedi. The IERPP contested claims of a crisis, crediting policy reforms and positive market conditions for the improvements. However, challenges remain, highlighting the need for ongoing structural changes and reforms. The differing views of government officials underscore the complexity of the economic situation as Ghana navigates its recovery path.

Original Source: 3news.com