 inflation target, citing a headline inflation rate of 23.8% at the end of 2024, above the IMF’s 18% benchmark){kind=link}
President John Dramani Mahama has accused the previous government of failing to meet the International Monetary Fund (IMF) inflation target, citing a headline inflation rate of 23.8% at the end of 2024, above the IMF’s 18% benchmark. However, at the true State of The Nation’s addressed by the Minority Caucus in parliament, the minority argue that Mahama’s assessment fails to acknowledge broader economic improvements and the context behind inflation trends.
Dr. Amin Adam leading the address, pointed out that inflation, which peaked at 54% at the end of 2022 due to the global economic shocks of COVID-19 and the Russia-Ukraine war, saw a sharp decline to 23% by the end of 2023. While still above the IMF’s 2024 upper band of 22%, this represents a significant improvement, showing that the disinflation process is on track.
Dr. Adam also highlighted that Mahama’s own administration in 2016 recorded an inflation rate of 15.4%, which exceeded the target of 10.1%, making his criticism seem inconsistent. He further argue that minor deviations from IMF programme targets are common, especially in uncertain economic environments, and often require consultations with the Fund for further assessments.
The minority further argued that inflation is just one measure of economic performance and that other indicators tell a more positive story breaking down otner key economic indicators.
• GDP Growth: Ghana’s economy recorded an average real GDP growth of 6.4% in the first three quarters of 2024, exceeding the IMF’s 4% target. This outperformed projections by both the IMF and World Bank. In contrast, Mahama’s government in 2016 saw a GDP growth rate of 3.4%, well below the target of 5.4%.
• Trade Balance: The country maintained a trade surplus of 5.9% of GDP in 2024, continuing a positive trend since 2017. Mahama’s administration ended 2016 with a trade deficit of 2% of GDP.
• Current Account Balance: Ghana recorded a rare surplus of 4.2% of GDP in 2024, strengthening the country’s external payments position. Under Mahama, the current account was consistently in deficit, ending 2016 with a 3.1% shortfall.
• International Reserves: The Bank of Ghana’s reserves reached a historic high of $8.9 billion, covering four months of imports. Comparatively, Mahama’s administration left office in 2016 with $6.2 billion in reserves, covering only 3.5 months of imports.
The Minority further remarked that Mahama’s rush to paint the economy as struggling ignores key economic strengths. They maintain that economic growth has rebounded, the external sector is performing well, and the country’s ability to withstand shocks is at an all-time high.
While inflation remains a challenge, the overall economic data suggests that Ghana is on a strong recovery path, contrary to Mahama’s narrative. As economic debates continue, it remains to be seen how the administration will respond to these counterarguments in shaping public perception of Ghana’s economic state.