Els: MBN360 Business
Ghana’s economic story over the past year has shifted dramatically. What began as a period marked by high inflation, rising debt, currency pressures, and elevated interest rates has evolved into what government officials describe as one of the most significant macroeconomic recoveries in the country’s history.
The 2025 fiscal year has not only stabilized public finances but also restored confidence across key sectors of the economy.
At the close of 2024, the situation was challenging. Inflation stood at 23.8 percent. The 91-day Treasury bill rate was as high as 27.7 percent, increasing borrowing costs across the economy. The Ghana cedi had depreciated by 19.2 percent against the US dollar. The primary balance on commitment basis recorded a deficit of 3.0 percent of GDP. Businesses were cautious, households felt the pressure of rising prices, and investor sentiment remained fragile.
Today, the narrative is markedly different.
Fiscal Discipline Anchors Recovery
At the heart of the turnaround lies a renewed focus on fiscal discipline and structural reform. Through strengthened revenue mobilization, tighter spending controls, and improved commitment management, government exceeded its fiscal targets in 2025.
The overall fiscal balance on commitment basis recorded a deficit of 1.0 percent of GDP, outperforming the initial target of 2.8 percent. Even more striking was the primary balance, which shifted to a surplus of 2.6 percent of GDP, well above the projected 1.5 percent surplus. On a cash basis, the primary balance also improved to a surplus of 0.5 percent of GDP compared to the earlier target of a 0.5 percent deficit.
These improvements are not just numbers on paper. They signal stronger public financial management and send a clear message to investors and development partners that Ghana is serious about sustainability.
Debt Reduction Signals New Direction
One of the most remarkable achievements of the year has been the sharp reduction in public debt. Ghana’s public debt stock fell by GH¢82.1 billion, declining from GH¢726.7 billion in December 2024 to GH¢641.0 billion in December 2025. In GDP terms, debt dropped from 61.8 percent to 45.3 percent.
This significant reduction is among the sharpest in the country’s recent history. It reflects a combination of prudent borrowing, sound debt management strategies, and stronger fiscal outcomes. Lower debt levels reduce pressure on public finances and create space for investments in infrastructure, social services, and job creation.
Inflation Falls, Stability Returns
For ordinary Ghanaians, perhaps the most visible sign of recovery is the sharp fall in inflation. After peaking at elevated levels, inflation has declined for thirteen consecutive months. It dropped from 23.5 percent at the end of January 2025 to 3.8 percent by January 2026.
Between 2024 and 2025, inflation reduced from 23.8 percent to 5.4 percent, and it has continued trending downward. Lower inflation means more stable prices for food, transportation, and basic goods. It restores purchasing power and helps families plan with greater certainty.
The drop in inflation has also created room for interest rates to decline.
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Interest Rates and Credit Expansion
Interest rates have fallen sharply over the past year. The 91-day Treasury bill rate declined from 27.7 percent at the end of 2024 to 11 percent by December 2025 and further to 6.5 percent in February 2026. This sharp reduction has significantly lowered government borrowing costs.
Commercial bank lending rates have also eased, falling from an average of 30.25 percent in 2024 to 20.45 percent in 2025. With inflation now at 3.8 percent, the downward trend is expected to continue, potentially making credit more affordable for businesses.
Encouragingly, credit to the private sector expanded by GH¢17.1 billion in 2025. This expansion suggests that businesses are regaining confidence and that banks are responding to improved macroeconomic conditions.
Cedi Appreciation and Strong External Position
Another striking development has been the performance of the Ghana cedi. After depreciating sharply in 2024, the cedi appreciated by 40.7 percent against the US dollar by the end of 2025. It also gained 30.9 percent against the pound sterling and 24.0 percent against the euro.
The strengthening currency has been supported by improvements in the external sector. Ghana recorded a current account surplus of US$9.1 billion by December 2025, a significant rise from US$1.5 billion in 2024. Gross international reserves climbed to US$13.8 billion, covering 5.7 months of imports.
These external gains reinforce macroeconomic stability and enhance Ghana’s resilience to global shocks.
Growth Rebounds Across Sectors
Beyond fiscal and monetary indicators, economic growth has rebounded strongly. Real GDP grew by a provisional 6.1 percent year on year in the first three quarters of 2025, driven largely by services and agriculture.
Non-oil growth was even stronger at 7.5 percent compared to 5.8 percent during the same period in 2024.
This broad-based expansion signals that recovery is not confined to one sector. Instead, it reflects a wider revival across the economy.
Sustaining the Gains
While the progress achieved in 2025 is significant, sustaining these gains will require continued discipline and reform. The administration of President John Dramani Mahama has reiterated its commitment to maintaining macroeconomic stability, supporting private sector growth, and creating jobs.
The journey from crisis to stability has not been easy. It demanded tough decisions, coordinated policy action, and a renewed focus on fundamentals. Yet the results so far suggest that Ghana has turned a crucial corner.
If the current trajectory is maintained, the broad-based macroeconomic turnaround of 2025 could mark the foundation for a new era of sustainable growth and economic transformation.
