Policy Reforms Steer Ghana Back Toward Investment Growth

By Praisebell Rosemond Larbi

Ghana’s ongoing macroeconomic reforms, fiscal consolidation efforts and collaboration with international financial institutions are gradually correcting the country’s economic trajectory and improving its appeal to investors, according to the latest Where to Invest in Africa 2025/26 report by South Africa–based Rand Merchant Bank (RMB).

The report notes that 2024 and 2025 have marked a period of careful recovery for Ghana, following years of fiscal slippages and heavy expenditure overruns by the previous administration. Backed by the International Monetary Fund’s Extended Credit Facility and extensive technical support from the World Bank, the government has intensified efforts to restore stability, rein in public spending and rebuild credibility with global markets.

RMB observes that these measures together with a renewed commitment to structural reforms are beginning to reshape investor sentiment. However, it stresses that sustained discipline will be essential, particularly in managing the cedi’s volatility, which it describes as “a critical determinant of progress.”

Inflation Pressures Easing, But Risks Remain

The investment bank recalls the severe macroeconomic pressures Ghana faced in recent years. “Consumer price inflation surged to over 37% in 2023, with a five-year average of 22.8%, despite the Bank of Ghana charging one of the world’s highest real interest rates,” the report states.

Food price shocks and rapid depreciation of the cedi were identified as the major drivers of high inflation, with the local currency losing nearly 19% of its value against the US dollar in 2024.

Still, the report points to what it calls “light at the end of the tunnel.” The first half of 2025 delivered a stronger-than-expected economic performance, with inflation continuing to fall and the cedi posting significant gains, factors that have helped stabilise consumer confidence and strengthen Ghana’s macroeconomic outlook.

Growth Outlook Improving

RMB maintains a positive medium-term outlook for Ghana, projecting that economic growth will rise to 4.0% by 2028, driven by improved fiscal management, a rebound in investor activity, and benefits from structural reforms.

The report emphasises that the country’s investment prospects will depend largely on its ability to maintain policy consistency, deepen structural reforms and stabilise the currency. “Managing the cedi’s volatility will be key to progress,” RMB cautions, echoing concerns shared by analysts and market watchers.

Focus on Ghana’s Structural Fundamentals

A key feature of RMB’s Where to Invest in Africa Index is its emphasis on fundamentals, what economists describe as structural elements of an economy. These factors are slow-moving, foundational and resilient, unlike short-term indicators that are vulnerable to temporary shocks.

According to RMB, Ghana’s fundamental strengths include its relatively diversified economy, steady improvements in infrastructure, strong financial sector reforms, a growing technology ecosystem and a youthful, increasingly skilled labour force. These attributes continue to position the country as one of West Africa’s most attractive investment destinations, even amid recent macroeconomic challenges.

The report notes that structural reforms under the IMF program, particularly in public financial management, revenue mobilisation, banking sector supervision and state-owned enterprise restructuring are creating a more predictable environment for private capital. Over time, RMB argues, these reforms will improve investor perceptions of risk and enhance Ghana’s competitiveness within the region.

Investor Caution Still Expected

Despite the progress made so far, the report emphasises that investors are likely to remain cautiously optimistic in the near term. Global economic uncertainty, tight financial conditions and geopolitical pressures still weigh on capital flows into emerging markets.

RMB adds that Ghana must demonstrate consistency in implementing the IMF-backed reforms, maintain a clear pathway to debt sustainability and show tangible improvements in exchange-rate stability to fully regain investor confidence.

Nonetheless, with economic indicators gradually improving and structural reforms deepening, RMB concludes that Ghana is steadily correcting its course and rebuilding the foundation for renewed investment growth.