The economy is expected to grow at a slower pace in 2025 as leadership changes and policy adjustments post-election take effect, according to the Ghana Market Outlook 2025 report by Databank Research.

The report forecasts real gross domestic product (GDP) growth at 3.6 percent year-on-year, marking a moderation from the strong recovery seen in 2024.

“We expect real GDP growth in 2025 to ease steadily at 3.6 percent year-on-year based on the following factors: building on the strong recovery seen in Ghana’s economy in 2024, we expect growth to moderate in 2025,” the report states.

The anticipated slowdown is attributed to anticipated policy shifts under the new administration, which is expected to focus on consolidating the achievements of the outgoing government.

“The transition to a new administration following the elections is likely to bring changes in policy priorities and strategies. While the new government’s plans may support long-term growth, the adjustment process and the efforts to consolidate the achievements of the previous administration may slow down policy implementation and sector activities in the short to medium term,” Databank observed.

In 2024, the economy continues to recover strongly, with real gross domestic product (GDP) growing by 7.2 percent year-on-year (YoY) in the third quarter (Q3) of 2024. This is a significant improvement from the 2.2 percent recorded in Q3 of 2023. On average, the economy grew by 6.3 percent over the first three quarters of 2024, a notable increase compared to the 2.6 percent growth recorded in the same period in 2023.

Provisional data from the Ghana Statistical Services (GSS) attributes this growth mainly to the mining and quarrying sector, followed by information and communication, crops, construction and manufacturing.

Cocoa sector rebound

In the agriculture sector, the government’s efforts to boost cocoa production are expected to yield modest growth.

“We foresee steady improvement in the cocoa sub-sector’s performance in 2025, although it will remain below historical averages. This enhancement is expected to support growth in the agriculture sector in the near term as the sovereign enhances efforts to incentivise cocoa farmers through stimulus packages, such as free tertiary education for their children and increases in the farmgate price of cocoa,” Databank noted.

These initiatives aim to combat cocoa smuggling, which has been exacerbated by competitive pricing in neighbouring Côte d’Ivoire and Togo. However, persistent climate-related challenges and limited financing may restrict broader growth in agriculture.

“Despite the government’s commitment to addressing climate-related challenges, particularly the dry spells in the north, constrained financing and shifting power dynamics may delay crucial interventions, resulting in sluggish growth in the agriculture sector, averaging around 3.1 percent year-on-year for FY ’25,” the report adds.

Industrial growth faces mixed prospects

The industrial sector is projected to grow between 4 percent and 6 percent year-on-year in 2025, supported by gains in gold mining and emerging spodumene concentrate (lithium) production.

“The increase in gold prices amid global uncertainties has significantly benefitted the industrial sector, with gold mining activities generating approximately US$7.27billion in August 2024, up from US$4.48billion in August 2023,” Databank highlights.

Despite this positive trend, structural challenges, including energy sector debt and budget constraints, could weigh on growth in construction and manufacturing. The report suggests potential relief from international support programmes.

“We remain cautiously optimistic about potential support from the World Bank’s Development Policy Financing (DPF) as part of its US$60billion Ghana Energy Sector Recovery Programme for Results (PforR),” it stated.

Services sector gains momentum

The services sector is anticipated to be a major driver of economic growth in 2025, bolstered by reforms and technological investments. Databank remarks: “We expect Ghana’s services sector to expand in 2025, underpinned by key reforms, including the potential removal of taxes on electronic money transfers and imported goods. This will likely stimulate demand for both domestic and imported products as cost pressures ease.”

The financial and insurance sub-sector, in particular, is seeing a recovery due to the recapitalisation of previously defunct financing institutions, improving market confidence.

“We expect this positive momentum will carry into 2025, further bolstered by the Ghana Financial Stability Fund, a five-year US$750million initiative aimed at enhancing sector stability,” the report states.

Technological advancements, such as the roll-out of 5G networks, are also expected to boost activity.

“Considering the potential benefits of a full roll-out of the 5G network amid enhanced investments in SMEs, we are optimistic about further expansion in the services sector in 2025,” Databank added.

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