Ghana’s recent macroeconomic rebound, while encouraging, is facing a delicate balancing act, according to Fitch Solutions.
The UK-based research and risk analysis firm warns that the sustainability of Ghana’s recovery remains heavily dependent on persistently high gold prices.
Gold, one of Ghana’s top foreign exchange earners, has been the primary cushion supporting the cedi, bolstering international reserves, and stabilising the broader economy.
Fitch notes that a sharp decline in gold prices — potentially triggered by easing geopolitical tensions — could significantly reduce Ghana’s dollar earnings. Such a scenario would leave the Bank of Ghana (BoG) with weaker external buffers and force the country to contend with renewed currency pressures.
Impact of a Gold Price Decline
In its latest analysis of Ghana’s economic outlook, Fitch Solutions painted a stark picture of what could happen if gold loses its shine on global markets. A steep fall in gold prices would not only cut export revenue but also put a strain on the country’s foreign reserves.
According to the report, this would likely weaken the cedi and result in imported inflation, as the cost of goods and services dependent on foreign exchange would spike. In response, the BoG would be compelled to maintain a tighter monetary policy stance for longer than currently anticipated, potentially slowing down growth momentum.
“A substantial decline in gold prices would drive a sharp rebound in inflation,” Fitch stated, warning that the central bank’s capacity to support the currency would be severely tested.
While many economies struggle with the delicate balance between interest rate cuts and currency stability, Fitch believes Ghana’s situation is somewhat insulated — as long as gold prices remain high. Even with the BoG’s recent 300 basis points policy rate cut in July 2025, Fitch argues that real interest rates will remain comfortably positive.
This, the firm says, means that the easing cycle is unlikely to trigger significant capital outflows, since Ghana’s cedi-denominated assets would still offer attractive returns to investors in real terms. However, this assumption hinges largely on gold maintaining its current elevated levels.
Elevated Gold Prices: A Lifeline Through 2026
Fitch Solutions forecasts that high global gold prices by historical standards will continue to support Ghana’s export earnings and foreign currency inflows through 2026. This would allow the BoG to sustain a healthy level of international reserves and intervene in the currency market when necessary to stabilise the cedi.
Such a scenario also creates room for a looser monetary policy stance, giving the central bank more flexibility to stimulate growth without risking excessive currency depreciation. In short, gold is not just a commodity for Ghana; it is the foundation of the country’s current economic stability.
Fitch, meanwhile, says the risks to Ghana’s interest rate trajectory are mixed. On the downside, the BoG’s willingness to cut rates in July 2025 signals a readiness to ease policy further if macroeconomic conditions continue to improve.
“If inflation continued to decline more rapidly than anticipated, the BoG would likely adopt a more accommodative stance than our baseline forecast suggests.”
Fitch
However, if gold prices unexpectedly plunge, the central bank could be forced to halt or even reverse rate cuts to defend the currency and keep inflation under control.
Ghana’s heavy reliance on gold exposes it to global commodity price swings, underscoring the importance of diversification. While the current macroeconomic recovery is being celebrated, Fitch’s warning serves as a reminder that the economy’s footing is not yet completely secure.
With elevated gold prices acting as the main pillar of stability, any disruption in the precious metal’s market could ripple through every sector of the economy — from trade balances to inflation and fiscal planning. Policymakers, therefore, face the challenge of not only managing the short-term risks but also building resilience against commodity shocks in the years ahead.
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