Ghana’s growth real but fragile
GHANA’S recent economic growth, fuelled by key sectors such as mining, construction, and ICT, has garnered praise from the International Monetary Fund (IMF), sparking optimism about the nation’s economic prospects.
However, while the IMF highlights stronger-than-expected performance, critical voices, such as Dr. Raziel Obeng-Okon, an economist and adjunct lecturer at the Ghana Institute of Management and Public Administration (GIMPA), have raised legitimate concerns about the long-term sustainability of this growth.
Dr. Obeng-Okon’s cautionary remarks, delivered during a recent interview on Zed 101.9FM, point to a broader issue: the structural imbalance within Ghana’s economy. The growth we are witnessing is heavily reliant on the mining and construction sectors, while agriculture and manufacturing — two sectors critical for inclusive and sustainable growth — are struggling. His assessment paints a sobering picture of a nation where economic gains, though real, are precarious due to challenges in these foundational sectors.
Agriculture, a traditional backbone of Ghana’s economy, has faced significant setbacks, including adverse weather conditions in key regions, resulting in reduced productivity. Manufacturing, another crucial sector for job creation and industrialization, remains weak.
Dr. Obeng-Okon’s warning is clear: the over-reliance on mining and construction growth is not a recipe for long-term economic stability. Rather, a balanced growth model that includes strong performance in agriculture and manufacturing is essential for sustainable development.
His concerns are particularly pressing as we look toward 2025, a year for which the IMF has forecast continued growth. But as Dr. Obeng-Okon notes, this optimism must be tempered with the reality that growth driven by narrow sectors could falter if structural issues in agriculture and manufacturing are not addressed. Without significant reforms and investments in these sectors, the rosy economic forecasts may not materialize.
Equally important is Dr. Obeng-Okon’s critique of Ghana’s fiscal discipline — or lack thereof. The fact that Ghana has turned to the IMF for assistance 17 times underscores a deeper problem with how successive governments have managed public finances. While the IMF program has provided some stability, it also serves as a reminder of the need for greater accountability and discipline in government spending.
Debt restructuring may offer temporary relief, but as Dr. Obeng-Okon points out, the real challenge begins once the restructuring process is complete. The energy sector, for instance, remains burdened with debt, with independent power producers demanding overdue payments. This, coupled with the broader fiscal pressures Ghana faces, means that prudent financial management is more critical than ever.
The key takeaway from Dr. Obeng-Okon’s analysis is that while the growth numbers may look promising on the surface, they mask underlying vulnerabilities. A sustainable economic future for Ghana requires more than short-term gains in specific sectors; it demands a comprehensive approach that addresses weaknesses in agriculture and manufacturing and promotes fiscal discipline.
As Ghana looks ahead, government must prioritize policies that promote balanced growth across sectors. Investments in agriculture and manufacturing, coupled with reforms that ensure fiscal responsibility, will be essential to securing long-term economic stability.
Failure to act could lead to a situation where the current growth is nothing more than a fleeting high, with the nation left to grapple with unresolved structural challenges. The message is clear: Ghana’s growth is real, but it is fragile. To sustain it, the government must take bold steps to diversify the economy and instil discipline in public financial management. Only then can Ghana achieve the inclusive and resilient growth that its people deserve.
