Ghana’s economy may be showing signs of recovery, but leading economist Dr. Daniel Anim-Prempeh has warned that the country is not yet out of the woods.
The Chief Economist at the Public Initiative for Economic Development (PIED) says the recent improvements in macroeconomic indicators should not lead to complacency, stressing that Ghana’s recovery remains fragile and incomplete.
Speaking on current economic conditions, Dr. Anim-Prempeh cautioned the government against any “premature celebration,” noting that although progress has been made in stabilising the economy, deeper structural challenges still threaten long-term growth.
Signs of Macroeconomic Improvement
Ghana’s economy has recorded some notable gains following the severe economic crisis that culminated in debt default and restructuring between 2022 and 2023. Recent data suggests a significant improvement in key macroeconomic indicators.
Inflation, which surged to more than 50 percent in December 2022 at the height of the crisis, has dropped dramatically to 3.8 percent as of January 2026. This sharp decline has helped ease pressure on households and businesses that were previously grappling with high costs of living and rising production expenses.
The Ghanaian cedi has also staged a remarkable recovery against major international currencies. The local currency has appreciated by 40.7 percent against the US dollar, 30.9 percent against the Pound Sterling and 24 percent against the euro.
Government officials say these improvements reflect the success of fiscal and monetary reforms implemented in recent years.
President John Dramani Mahama, delivering the State of the Nation Address on Friday, February 27, highlighted further signs of stabilisation in the country’s financial position.
According to the President, Ghana’s foreign reserves have strengthened significantly. The country’s reserves currently stand at US$13.8 billion, which is enough to cover 5.7 months of imports.
He also indicated that Ghana’s public debt had been reduced by GHS82.1 billion, bringing the debt-to-GDP ratio down from 61.8 percent to 45.3 percent.
In addition, the government settled US$1.4 billion in debt service payments in 2025 as part of efforts to restore credibility with international partners and rebuild investor confidence.
Persistent Structural Challenges
Despite these encouraging developments, Dr. Anim-Prempeh insists that Ghana’s economic recovery remains fragile and vulnerable to setbacks.
“We are not totally out of our economic mess; we still have an issue with the cocoa sector, we’re still battling with electricity issues, and the government is yet to pay outstanding salaries of some workers, indicating that the resources are not there in the quantum to address all these challenges.”
Dr. Anim-Prempeh
He noted that the government must continue to manage the economy carefully, particularly as several key sectors still face deep structural problems.
Dr. Anim-Prempeh acknowledged the role of reforms under the US$3 billion International Monetary Fund supported programme in helping to restore stability.
“The government must tread cautiously because persistent challenges remain in critical sectors, and this requires continued fiscal discipline and cautious management to sustain gains achieved under the IMF programme.”
Dr. Anim-Prempeh
The economist stressed that without sustained discipline in public finances, the progress made in stabilising the economy could easily be reversed.
Strengthening Ghana’s Production Base
Beyond fiscal discipline, Dr. Anim-Prempeh emphasised the need for Ghana to expand its productive capacity, particularly in the manufacturing sector.
According to him, a strong manufacturing base is essential if the country wants to reduce its dependence on imports and strengthen its foreign exchange position.
“We need to build a strong production base – our manufacturing base must be strong. It is then that we will minimise the importation of unnecessary items into this economy and ease the burden on our reserves, thereby beefing up our foreign exchange position.”
Dr. Anim-Prempeh
Reducing import dependence would also help stabilise the cedi and protect the country’s reserves from external shocks.
He explained that industrialisation and local production remain critical pillars for building a resilient economy capable of sustaining long-term growth.
Private Sector Key to Job Creation
Dr. Anim-Prempeh also called for stronger support for the private sector, which he believes holds the key to sustainable job creation and economic expansion.
He said government incentives under the proposed 24-hour economy initiative could help stimulate investment and boost productivity across various sectors.
Some of the incentives under the initiative include tax exemptions on the importation of machinery for manufacturing, solar and renewable energy inputs, raw materials not available locally, vehicles and logistics equipment, as well as corporate income tax exemptions for farming in strategic value chains.
According to him, such measures could help businesses expand operations and generate employment opportunities for Ghana’s growing youth population.
“Supporting the private sector to create sustainable jobs for the teeming youth is very critical. These are key things that ought to be done. It’s very difficult, but when they focus and commit to the cause, they should be able to do it.
“Going forward, the big question is how we are going to sustain the gains post-IMF. Are we going to have the fiscal discipline that is required to be able to have sustained macroeconomic performance?”.
Dr. Anim-Prempeh
Warning Against Complacency
Dr. Anim-Prempeh concluded by urging the Ministry of Finance and managers of the economy to demonstrate strong commitment to fiscal discipline even after the IMF programme ends.
He warned that economic recoveries can easily unravel if governments abandon prudent fiscal management once external oversight is removed.
The economist also cautioned that Ghana’s recovery remains vulnerable to policy reversals, external economic shocks and fiscal loosening during election periods.
For Ghana to achieve lasting stability and growth, he said policymakers must remain focused on strengthening economic fundamentals, expanding production and maintaining discipline in public finances.
Without these measures, the country risks slipping back into economic instability despite the gains made so far.
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