Economy on path of recovery – Finance Minister

By Isaac AIDOO, Accra

GHANA’S economy is firmly on the path to recovery, with the country posting its highest growth rate in the past five years.

Minister of Finance, Dr. Mohammed Amin Adam, revealed that the economy recorded an impressive 5.8% growth in the first half of 2024.

This growth was largely driven by the industry and agriculture sectors in the first quarter and a more diversified contribution in the second quarter from services, along with industry and agriculture.

The figures—4.8 percent in the first quarter and a remarkable 6.9 percent in the second—are indicators that the economy is not only stabilizing but is back on a strong growth trajectory.

Speaking at the second Quarterly Economic Roundtable held in Accra, Dr. Adam emphasized that the robust performance had caught the attention of major economic analysts, leading them to revise their projections for Ghana’s economy upwards.

“The half-year growth of 5.8 percent recorded for 2024 is the highest in the last five years. This means we are back on track, and our policies to support the private sector are having a significant impact,” he stated.

Dr. Adam noted that the positive growth has already begun attracting foreign investors and companies back to the country. He pointed out that Virgin Atlantic, which had exited the Ghanaian market in 2013 due to economic challenges, has now returned to resume operations, citing the economy’s rebound as a key factor.

“It’s important to note that companies are returning because they see that the growth trajectory is positive,” Dr. Adam explained, adding that other companies are expected to follow suit in the coming months.

The roundtable discussion, themed “Driving Economic Growth through Small and Medium-sized Enterprises (SMEs),” was jointly organized by the Ministry of Finance and the University of Ghana. The event brought together government officials, business leaders, financial experts, and academia to discuss the critical role of SMEs in driving economic growth.

Dr. Adam reiterated the government’s commitment to supporting SMEs, recognizing them as central to Ghana’s economic recovery. He reassured business owners that SMEs remain a priority for the government, saying, “You are not alone or lonely. You are the priority of the Ghanaian society and this government. We will not fail you.”

In addition to this, the Minister pointed to ongoing reforms aimed at addressing the challenges faced by SMEs, particularly in accessing finance, regulatory bottlenecks, and market linkages. He stressed that sustaining this upward growth trajectory will require mitigating potential risks and strengthening partnerships with both local and international stakeholders, especially within the SME sector.

SMEs, which constitute the backbone of the Ghanaian economy, are critical drivers of employment and innovation. This was underscored by Kyle Kelhofer, Senior Country Manager at the International Finance Corporation (IFC), who called for stronger collaboration between financial institutions, the private sector, academia, and the government to develop innovative and resilient structures that will allow SMEs to thrive.

Kelhofer acknowledged the significant contributions of SMEs to Ghana’s economic landscape and noted the IFC’s efforts to enhance their access to financing. He revealed that the IFC has committed over $400 million in investments in the past year alone, with $150 million specifically directed to SMEs through intermediary banks and financial institutions.

Kelhofer also highlighted innovative platforms implemented by the IFC over the years to support SMEs, such as improving access to trade finance, expanding supply chain finance, and enhancing bank risk appetite for SME on-lending. These efforts, he noted, are yielding positive results and contributing to the growth of the SME sector in Ghana.

Professor Nana Aba Appiah Amfo, Vice-Chancellor of the University of Ghana, also spoke at the event, emphasizing the need for practical solutions that can transform discussions into actionable policies. She reiterated that SMEs play a crucial role in the country’s economy, contributing significantly to Gross Domestic Product (GDP) and job creation.

Professor Amfo urged stakeholders to address key challenges such as cumbersome regulatory processes, complex tax systems, limited access to finance, and high utility costs that continue to hinder the growth of SMEs.

“We must ensure that the ideas and recommendations from this roundtable are translated into concrete actions that improve development outcomes and the wellbeing of Ghanaians,” she said.

The Quarterly Economic Roundtable concluded with a shared vision for Ghana’s future—a vision where SMEs continue to be at the heart of economic growth, supported by targeted government interventions and strong partnerships with the private sector, international investors, and financial institutions. As the country charts its path towards sustained economic recovery, there is optimism that these collaborations will further unlock the potential of SMEs, solidifying their role as key drivers of national development.