While Ghana's GDP growth is projected to gradually increase to around 5.0% beyond 2024, the International Monetary Fund (IMF) has highlighted significant downside risks that could impact this positive outlook.

According to the IMF's Country Report on Ghana, the macroeconomic outlook remains positive, with a revised growth projection for 2024 of 4.0%, up from 3.1%.

However, the report underscores several potential threats that could derail this growth.

External Risks

The IMF points to several external risks, including the intensification of regional conflicts and spillovers from the conflicts in Ukraine and the Middle East.

These could lead to higher imported inflation and increased risk aversion.

Additionally, commodity price volatility remains a significant concern, potentially impacting Ghana through higher costs and economic instability.

Climate and Agricultural Challenges

Climate-related risks are also a major concern. Prolonged weak cocoa harvests, driven by adverse weather conditions and diseases, could negatively affect exports and growth prospects.

“If protracted, weak cocoa harvest could affect exports and growth prospects. More generally, Ghana is subject to risks related to climate shocks. On the domestic side, policy slippages ahead of the end-2024 general elections or during the political transition could undermine macroeconomic stability, deteriorate domestic financing conditions and the debt dynamics, and complicate debt restructuring discussions with Ghana’s remaining external commercial creditors,” the report added.

Inflation and Exchange Rate Volatility

The IMF also warned that risks to the inflation outlook are tilted to the upside. The disinflationary process has been slower than anticipated, and exchange rate volatility has increased.

The Fund projects inflation to reach 18% by the end of 2024, up from an earlier estimate of 15%, mainly due to price pressures from a weaker cedi and ongoing dry spells.

ID/AE

Watch some videos from the 2024 general elections below: