Accra, 3rd March 2025 – The causes of Ghana’s 2022 macroeconomic crisis can be traced back to factors well before the onset of COVID-19 and the global economic downturn, according to Hon. Dr. Cassiel Ato Forson, Minister for Finance. In his presentation at the National Economic Dialogue, Dr. Forson emphasized that the Ghanaian economy was already in a fragile state before these external shocks intensified the challenges.
Ghana’s economic trajectory has been marked by impressive growth since the early 2000s. Over the past two decades, the country has consistently ranked among the top ten fastest-growing economies globally. From 2008 to 2019, Ghana’s economy grew at an average rate of 6.8% per year, surpassing regional and global averages of 4.4% and 2.7%, respectively. As a result, the country’s GDP per capita doubled during this period, averaging a 3% annual growth.
However, Dr. Forson noted that this growth was largely driven by the oil and mining sectors, which also contributed to an increase in the country’s debt accumulation. Ghana reached middle-income status in 2011, with oil production, which began in 2011, playing a key role in the economic expansion, contributing an average of 5% to the nation’s GDP. The mining sector also significantly contributed to growth, accounting for nearly 20% of GDP expansion between 2013 and 2019.
Despite these successes, the period was also marked by escalating fiscal imbalances, leading to a rapid rise in public debt. The fiscal deficit averaged around 4% of GDP from 2008 to 2019—more than double the deficit rate of the previous decade. Public debt surged from 20% of GDP in 2006 to a staggering 93% by 2022. Dr. Forson explained that this accumulation of debt, coupled with global commodity-price fluctuations, left the economy vulnerable to external financial pressures.
Although Ghana witnessed robust growth, this did not translate into structural transformation or enhanced productivity. Dr. Forson pointed out that the agriculture sector continues to account for about one-fifth of the GDP and one-third of the labor force, with limited progress in diversifying the economy. Productivity in manufacturing remains low, and high-productivity sectors such as commercial mining and construction employ only a small portion of the workforce. Meanwhile, a significant portion of the labor force, including those in higher-income brackets, has been absorbed into the informal sector and self-employment.
In contrast to the experience of advanced economies, Dr. Forson noted that the shift of workers from agriculture has predominantly been into low-productivity services, such as hospitality and wholesale and retail trade, which now comprise a quarter of the nation’s labor force.
Dr. Forson’s presentation highlighted the challenges facing Ghana as it seeks to stabilize its economy, reduce its reliance on oil and mining, and foster a more diversified and productive economy in the coming years.
Source:Mybrytfmonline.com/Gumedzo Isaac Acheampong
