ISSER Warns of Rising Poverty as Ghana’s Economic Growth Slows

Professor Quartey attributed the projected slowdown to low capital investment, currently pegged at just 2.5% of GDP, and the slow implementation of the government’s much-publicized 24-hour economy policy.

“The 24-hour economy is a medium-to long-term measure and will take time to yield results,” he cautioned, warning that immediate economic relief should not be expected from the initiative.

Ghana’s fiscal situation also remains a major concern. The country missed its 2024 revenue and deficit targets, recording a fiscal deficit of 7.9%—far above the revised target of 4.2%. Revenue collection underperformed, reaching 15.9% of GDP instead of the expected 17.4%, while government spending exceeded projections.

On debt sustainability, Professor Quartey acknowledged that Ghana’s debt-to-GDP ratio has declined to 61.8% due to restructuring efforts, moving closer to the International Monetary Fund’s (IMF) recommended 55%. However, he warned against complacency.

“We’re inching towards the IMF’s recommended 55%, but complacency could plunge us back into crisis,” he cautioned.

Professor Quartey further warned that the government’s reliance on domestic borrowing to fund its deficit could crowd out private sector access to credit, push up interest rates, and ultimately stifle economic growth.

“We risk repeating past mistakes if we’re not careful with borrowing and debt repayment,” he added.