The Institute of Economic Affairs says Ghana’s macroeconomic stability is taking hold, but the country now faces a harder test: turning the improved numbers into jobs, higher productivity and better living conditions.
In its assessment of the 2026 Mid Year Budget Review, the IEA acknowledged substantial gains across growth, inflation, interest rates, public debt and the fiscal position during the first half of the year.
The economy expanded by 6.4% in the first quarter, ahead of the government’s 4.8% full year target. Inflation, which stood at 23.8% in December 2024, fell to 5.4% a year later before edging up to 5.7% by June 2026.
The primary balance also recorded a surplus equivalent to 0.9% of GDP by June, while the overall fiscal deficit stood at 0.2% of GDP.
“The government has done well to achieve some reasonable macroeconomic stability,” the IEA said.
Growth Quality Raises Questions
The think tank, however, is less comfortable with where that growth is coming from.
Services expanded by 7.1%, while industry grew by 6.9%, driven significantly by mining and quarrying, which recorded growth of 10.7%. Agriculture lagged behind at 4.0%.
For the IEA, the heavy contribution from services is a concern because parts of the sector have limited capacity to absorb Ghana’s growing labour force.
“The quality of growth matters,” the Institute said, arguing that stronger employment outcomes will depend on deliberate investment in agriculture, industrialisation and mineral value addition.
The challenge, it noted, is to avoid a recovery that looks impressive in GDP data but leaves large numbers of young people without productive work.
Stability Must Become a Launchpad
The IEA’s broader argument is that fiscal consolidation should not become an end in itself.
Lower expenditure can improve headline fiscal numbers, but the impact depends on which spending is cut and whether the remaining resources are directed into productive sectors.
The Institute wants government to move beyond what it calls “stabilization budgeting” towards a more transformational approach centred on infrastructure, value addition and sustainable employment.
“Two years of stabilization budget is enough,” it said.
The IEA also warned against another cycle in which fiscal discipline restores stability only for later slippages to trigger another crisis.
“The question is no longer whether Ghana can stabilize its economy,” the Institute said. “The question is whether we have the courage to consolidate those gains into lasting economic transformation.”
Its message to government is therefore fairly blunt: the stabilisation phase has delivered results, but the next phase must be judged by whether investment, production and employment improve.
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