Ghana’s economic struggles could push more citizens into poverty if growth remains slow, the Institute of Statistical, Social and Economic Research (ISSER) has warned.
Despite a 5.7% GDP growth in 2024, the country is expected to experience an economic slowdown in 2025, with growth projected at 4%—below the Sub-Saharan Africa average of 4.2%.
Addressing stakeholders on Ghana’s economic outlook, ISSER Director, Professor Peter Quartey, attributed the projected decline to reduced capital investment, stringent fiscal policies, and the slow rollout of the 24-hour economy initiative.
“The 24-hour economy is a medium-to-long-term strategy. It will take time to yield results,” he cautioned, urging realistic expectations.
Additionally, the country’s capital investment stands at just 2.5% of GDP, significantly lower than required to drive sustainable development.
Ghana’s fiscal deficit reached 7.9% in 2024, exceeding the revised 4.2% target, while revenue fell short at 15.9% of GDP, compared to the projected 17.4%.
Although the debt-to-GDP ratio has declined to 61.8%, Professor Quartey warned against complacency.
“We’re moving towards the IMF’s recommended 55% debt-to-GDP ratio, but any missteps could plunge us back into crisis,” he stated.
He also raised concerns about government borrowing from domestic sources, arguing that it could crowd out private businesses, limit access to credit, and increase interest rates.
“Already, businesses are struggling with limited access to credit and declining consumer demand. If government borrowing tightens the credit space, economic growth will suffer further,” he noted.
The government’s plan to increase income and property tax revenue by 45.4% in 2025 was described by Professor Quartey as “overly ambitious”, with no clear strategy in place to achieve it.
“What new measures are in place to meet this target?” he questioned, emphasizing the need for realistic revenue projections and data-backed policies.
While he acknowledged digital taxation systems as a step forward, he criticized the poor accessibility of tax refunds, arguing that it discourages compliance.
“If businesses don’t believe they’ll get their money back, they’ll simply find ways to evade taxes,” he warned.
Key job-creating sectors such as agriculture and industry are also showing signs of weakness.
- Agriculture grew by only 2.8% in 2024 and is expected to increase marginally to 3.1% in 2025.
- Industrial growth is projected to fall from 7.1% to 3.8%, while the services sector is also slowing down.
This could mean fewer job opportunities and rising living costs for Ghanaian households, especially as the government implements aggressive revenue mobilization strategies.
To avoid further economic instability, Professor Quartey called for stricter enforcement of fiscal responsibility laws, urging the government to adopt evidence-based policies rather than recycling ineffective ones.
“If we fail to monitor economic progress and make timely adjustments, we risk introducing new taxes mid-year to cover shortfalls,” he warned.
With Ghana’s economic stability hanging in the balance, ISSER’s recommendations highlight the urgent need for sound policies, disciplined governance, and transparent fiscal management to prevent further economic hardship.
