Accra, 3rd March 2025 – In a detailed presentation at the National Economic Dialogue, Hon. Dr. Cassiel Ato Forson, the Minister for Finance, highlighted the current state of the Ghanaian economy, underscoring significant challenges in diversification, poverty reduction, and rising inequality.
Dr. Forson pointed out that Ghana’s export sector remains heavily reliant on primary products with minimal value addition, which hampers the potential for economic diversification. In 2024, the top three exports—gold, crude oil, and cocoa beans and their products—accounted for 85.1% of the country’s total exports. The lack of high-productivity manufacturing has prevented Ghana from fully exploiting regional and international trade opportunities, including those under the ECOWAS, AGOA, EPA, and AfCFTA agreements. This dependence on primary commodities calls for strategic efforts to diversify the economy and integrate more effectively into global value chains.
The Minister also addressed the growing disconnect between economic growth and poverty reduction. Despite continued GDP per capita growth, the benefits of this expansion have become less inclusive. Since 2012, poverty reduction has stagnated, with the bottom 40% of the population experiencing almost no consumption growth. Particularly concerning, the poorest 10% saw a 5% decline in consumption. Furthermore, structural fiscal weaknesses have hampered the government’s ability to mitigate the effects of high inflation and slower growth, which have reversed previous gains in poverty reduction.
Dr. Forson noted that income inequality has also worsened over recent years. Regional disparities persist, with poverty rates in the Upper East, Upper West, and Northern regions remaining above 50%. Rapid urbanization has contributed to rising inequality within cities, although urban poverty rates have decreased, the overall number of urban poor has not shown significant improvement. Particularly vulnerable communities in lower-elevation slums face higher fertility rates, lower school attendance, limited access to sanitation, and greater susceptibility to natural disasters.
In 2024, Ghana’s inequality levels were reported to be worse than those of several neighboring countries, including Côte d’Ivoire, Nigeria, Benin, and Togo. Dr. Forson emphasized the need for targeted policies to address these pressing challenges and create a more inclusive and equitable economic environment.
The Minister’s remarks reflect the pressing need for economic reforms that focus on broadening Ghana’s economic base, reducing inequality, and ensuring that the benefits of growth are more widely shared across the population.
Source:Mybrytfmonline.com/Gumedzo Isaac Acheampong
