The economic think tank projects that the GDP growth rate of the nation will average 4.4% between 2024 and 2029, with a range of 4.0% to 5.0%.
The IFS has recommended the next government to carry out deliberate initiatives to enhance economic development beyond these predictions, given Ghana's high unemployment rate, particularly among the youth.
Nonetheless, the Institute is conscious of the nation's precarious financial situation. Therefore, we advise the government to prioritize spending on important real sectors in order to address this. First and foremost, we advise the agriculture industry," the statement said.
Agriculture as a Major Engine of Growth
Given Ghana's advantageous natural conditions, the IFS underlined that agriculture has a substantial potential to spur economic growth and employment creation.
It stated that Ghana is well-positioned for large-scale agricultural output due to its plentiful sunshine, ideal rainfall levels, and vast agricultural land—126,037.4 square kilometers as of 2021, according to World Bank data.
Ghana's External Sector Reset
Reforms in Ghana's external sector, specifically in the ownership structure of the nation's main merchandise exports, were also demanded by the IFS.
It noted that Ghana's merchandise exports have had less impact on stabilizing the cedi, despite being a major driver of trade and current account balances.
With an average trade balance of $1.751 billion and a current account deficit of $1.970 billion, Ghana's average merchandise exports from 2017 to 2019 were $14.815 billion. Even still, during this time, the cedi's average depreciation against the US dollar was 8.7%.
The average current account deficit increased by $368 million to $2.338 billion in 2020–2021, while merchandise exports fell by $215 million to $14.600 billion, worsening the trade balance by $180 million to $1.571 billion.
With an average trade balance of $1.751 billion and a current account deficit of $1.970 billion, Ghana's average merchandise exports from 2017 to 2019 were $14.815 billion. Even still, during this time, the cedi's average depreciation against the US dollar was 8.7%.
The average current account deficit increased by $368 million to $2.338 billion in 2020–2021, while merchandise exports fell by $215 million to $14.600 billion, worsening the trade balance by $180 million to $1.571 billion.
The performance of the cedi is not substantially correlated with trade balances or merchandise exports, according to the IFS. To handle the cedi under the capital and financial account of the balance of payments, the government has instead mostly relied on borrowing from outside.
In order to fortify the nation's external sector and improve economic resilience, the institution emphasized the necessity of a change in economic strategy, concentrating on sustainable domestic production and ownership of export businesses.
In order to fortify the nation's external sector and improve economic resilience, the institution emphasized the necessity of a change in economic strategy, concentrating on sustainable domestic production and ownership of export businesses.