Introduction
In 2024, Ghana’s economy continues to grapple with severe challenges, from rampant inflation and a depreciating cedi to mounting debt and unemployment rates, all of which starkly contrast with the more optimistic economic conditions of 2016. Digitalization, a key strategy promoted by the government, has yet to yield transformative economic benefits, with figures showing limited improvement in sectors such as agriculture, education, and job creation. In contrast, the National Democratic Congress (NDC) proposes a 24-hour economic policy aimed at stabilizing the economy and creating sustainable growth. This policy would focus on consistent and coordinated economic decision-making that can adapt quickly to global market changes, with the potential to restore investor confidence and reduce volatility.
This article succinctly captures the essence of Ghana’s current economic struggles in relation to past conditions, questions the efficacy of the NPP’s proposed solutions, and introduces the specific issue of digitalization. It also emphasizes a forward-looking solution in the form of a 24-hour economic policy, which is positioned as a potential game-changer for Ghana’s recovery.
2.0. Outline and Analysis
Inflation and Currency Depreciation: Ghana has faced significant inflationary and currency depreciation challenges from 2016 to 2024, impacting its economic stability and growth. In 2016, Ghana’s inflation rate peaked at approximately 17.5%, driven by fiscal pressures and currency devaluation as a result of economic challenges like high government spending and lower global commodity prices. This led to steady inflationary pressures that affected consumer purchasing power and overall economic confidence (Statista, 2024).
By 2024, Ghana’s inflation challenges have intensified. Recent reports show that inflation surged to a high of 40.3% in 2023 before stabilizing around 21.5% by September 2024. These levels were fueled by external shocks, including the global energy crisis and local currency depreciation. The Ghanaian cedi has struggled significantly, depreciating by approximately 60% in 2022 before slowing to a 17% decline in 2023, largely due to persistent trade imbalances and fiscal policy challenges (African Development Bank, 2023; Trading Economics, 2024). However, in 2024, the Ghanaian cedi has faced significant depreciation against the US dollar, continuing the trend seen in the previous years. As of mid-2024, the cedi has depreciated by approximately 19.5% against the dollar, with the retail rate hovering around GH¢15.60 to $1, while the Bank of Ghana’s official rate is slightly lower at GH¢14.78 to $1. This depreciation has made imports more expensive, pushing up prices on essential goods and fueling inflation.
This is part of a broader depreciation trend, where the cedi has lost around 74% of its value against the dollar over the past three years, including declines of 30% in 2022 and nearly 28% in 2023
This ongoing decline is attributed to factors such as inflation pressures, high demand for foreign currencies, and uncertainties surrounding Ghana’s political and economic landscape, especially with upcoming elections and discussions around IMF support.
The combined effect of inflation and currency depreciation has strained Ghana’s economy by increasing the cost of living and making it challenging for businesses to operate sustainably. As a result, inflation has remained above the Bank of Ghana’s target range, complicating monetary policy efforts to achieve price stability. Addressing these issues would require policy reforms focusing on improving revenue mobilization, controlling public spending, and promoting currency stabilization through diversified export growth and foreign direct investment attraction.
Debt Management: Ghana’s debt burden has seen significant increases between 2016 and 2024, leading to economic challenges and raising concerns over fiscal sustainability. In 2016, Ghana’s debt-to-GDP ratio was about 56%, marking a moderate level of debt that allowed the government some fiscal space to engage in infrastructure projects and public investments (World Bank, 2017). However, from 2020 onwards, Ghana’s borrowing increased sharply, partly due to the pandemic, ambitious development projects, and ongoing economic mismanagement.
By 2024, Ghana’s debt has soared, with recent estimates placing the debt-to-GDP ratio well above 80% (World Bank, 2024; IMF, 2024). This significant debt level has prompted Ghana to engage in a series of debt management strategies, including a Domestic Debt Exchange program. This program, aimed at restructuring debt and alleviating repayment pressures, diverted over 60 billion Ghanaian cedis from pension funds and other financial assets, impacting personal and institutional savings and increasing public discontent (GhanaWeb, 2024). Additionally, Ghana’s external debt, driven by reliance on Eurobonds and loans from multilateral institutions, has
reached an unsustainable level, necessitating multiple bailouts from the International Monetary Fund (IMF) amounting to $3 billion in the recent bailout package alone (IMF, 2024).
The rapid debt accumulation has resulted in Ghana’s credit rating being downgraded multiple times, reflecting a lack of investor confidence and raising borrowing costs for the government. The government’s response has been constrained by inflation, which exceeded 54% in late 2022, partially due to the Bank of Ghana’s decision to print cedis to cover budget shortfalls (World Bank, 2024). This approach has further weakened the Ghanaian cedi, eroded purchasing power, and contributed to rising food prices, which have made debt servicing even more challenging.
In comparison to 2016, Ghana’s current debt burden has introduced new and severe economic pressures that not only limit government spending capacity but also have broader social implications, with public services like healthcare and education facing budget cuts to meet debt obligations. These challenges indicate that without robust and sustainable fiscal reforms, Ghana may continue to face high debt servicing costs, limited investor confidence, and economic instability.
Unemployment: Ghana’s unemployment rate has seen significant fluctuations between 2016 and 2024, reflecting broader economic and structural challenges. In 2016, Ghana’s official unemployment rate was approximately 5.5%, with significant portions of the workforce employed in informal sectors where income and job security were precarious. The youth population in particular faced high unemployment, largely due to a skills mismatch and limited formal job opportunities, which contributed to social and economic pressures.
As of 2024, the unemployment rate has risen sharply, averaging 14.7% in early 2023, marking a considerable increase in joblessness over the past decade. The Ghana Statistical Service reported that youth unemployment and underemployment have intensified, even in the era of One-District-One Factory industrialization, particularly among females, who represent a higher portion of the unemployed population. This increase is partly attributed to slow economic recovery post-COVID-19, inflationary pressures, and limited job creation in high-demand sectors. Structural issues, including a lack of skilled labor in certain industries and economic dependency on limited sectors, have further constrained job opportunities, pushing many into informal employment and underemployment.
The factors contributing to the increased unemployment rate include Ghana’s high debt levels, inflation, and the depreciation of the Ghanaian cedi, which have led to rising costs for businesses and reduced purchasing power for households. Fitch Solutions projects the rate to stabilize at around 4%, but this forecast may not fully reflect the challenges in capturing informal unemployment or underemployment in the data.
Addressing Ghana’s rising unemployment will likely require a multifaceted approach, including investment in vocational and technical education, initiatives to diversify the economy, and policies aimed at supporting entrepreneurship, particularly among the youth and women who are most affected by unemployment.
Healthcare: In 2016, Ghana’s healthcare system had improved infrastructure, however, insufficient access to medical care in rural areas, and challenges related to the National Health Insurance Scheme (NHIS), had a coverage rate of about 64% (Oxford Business Group, 2019). The government aimed to improve healthcare access by enhancing the NHIS, which had its share of financial and operational difficulties.
By 2024, Ghana’s healthcare sector has seen some progress, but significant challenges remain. The NHIS coverage increased to around 68% of the population by 2021, but there are still large disparities between urban and rural healthcare facilities. In addition, the economic impact of the COVID-19 pandemic exacerbated existing weaknesses, such as a shortage of medical professionals and the high cost of importing medical supplies. The rise in the value of the cedi relative to the US dollar has compounded the cost of healthcare for many Ghanaians, especially in the private sector.
Education: Ghana’s education system faced some issues including inadequate infrastructure, teacher shortages, and low enrollment rates in secondary and tertiary education. However, the government launched the Free Senior High School (SHS) policy in 2017, aimed at providing free education for all students at the secondary level. This policy has helped improve enrollment rates, with the net enrollment rate at the secondary level rising to 58.3% by 2022.
By 2024, Ghana has made substantial strides in improving access to education, especially with the increase in public investment and the adoption of digital learning platforms. However, challenges remain, particularly in the quality of education and the distribution of resources. The allocation of government funding to education has decreased, with a real-term reduction in the education budget in 2023.
Furthermore, teacher-pupil ratios remain high, particularly in rural areas, and private schooling is still growing due to perceived better quality, leading to a growing divide between the education quality received by urban and rural students.
Corruption and governance: Corruption and governance in Ghana have been persistent challenges that have worsened in recent years. In 2016, Ghana scored 43 on the Corruption
Perceptions Index (CPI), ranking 70th out of 180 countries. This was relatively stable compared to other African nations but still indicated substantial issues in public administration, especially within sectors like healthcare and infrastructure.
Despite this, there was optimism about the potential for anti-corruption reforms, including the passage of the Public Procurement Law in 2004 and an ongoing push for greater transparency.
However, by 2024, the situation has stagnated, with Ghana still scoring 43 on the CPI for the fourth consecutive year. This persistent stagnation can be attributed to systemic failures within the justice system, which has weakened the ability to hold public officials accountable. Corruption remains rampant in government contracts, particularly in procurement processes, which continue to be subject to bribery and influence peddling.
In the public sector, corruption has also undermined crucial services. For example, Ghana’s health sector, ranked second most corrupt in Africa as of 2017, still faces issues like bribery and fraud, particularly in the allocation of resources and the misdirection of patients to private clinics for personal gain.
The weak legal frameworks and lack of enforcement mechanisms have allowed such practices to continue unchecked, contributing to a broader culture of corruption.
The NPP government’s anti-corruption measures have faced significant criticism, primarily due to delays in enacting stronger legal frameworks, such as the Conduct of Public Officers’ Bill, which could address issues like asset declaration verification.
Moreover, while the government has made efforts to digitalize processes in public services, these reforms have not yet yielded the transformative results expected in tackling corruption.
To address these issues, the NDC manifesto proposes a comprehensive anti-corruption strategy that focuses on strengthening legal frameworks, improving public accountability, and fostering transparency. This includes faster enactment of the Conduct of Public Officers’ Bill and better implementation of public procurement reforms.
The NDC also calls for greater support for the Commission on Human Rights and Administrative Justice (CHRAJ) to enhance its oversight functions, ensuring more effective punishment for those involved in corrupt practices.
2.1. The Moderating Role of Digitalization and a 24-Hour Economy
Digitalization has been a core component of the New Patriotic Party (NPP) government’s economic strategy in recent years, touted as a key avenue for driving growth, enhancing public services, and improving productivity. However, the actual impact of digitalization on Ghana’s broader economic challenges has been limited, with several structural issues still undermining its potential. By contrast, the National Democratic Congress (NDC) has proposed a 24-hour economic policy, aimed at ensuring continuous decision-making and responsiveness to economic challenges, which could provide a more effective approach to stabilizing and growing Ghana’s economy.
2.1.1. Effects of Digitalization
Infrastructure and Accessibility: While the NPP government has made notable strides in introducing digital platforms (e.g., the Digital Address System, e-Government Services, and mobile money expansion), the fundamental issue of infrastructure remains a significant barrier. According to the World Bank, Ghana’s broadband penetration is still limited, particularly in rural areas, where 60% of the population lacks reliable internet access (World Bank, 2024).
This lack of infrastructure undermines the effectiveness of digital solutions, preventing equitable access and hindering the growth of key sectors like agriculture, education, and healthcare.
Job Creation: Digitalization has not led to the expected surge in employment opportunities. While the government has aimed to digitize services like the National Health Insurance Scheme (NHIS) and customs processes, these have not significantly expanded the job market. The unemployment rate in Ghana remains high at approximately 14.7% (Modern Ghana, 2024), and youth unemployment is particularly problematic. A report by the Ghana Statistical Service noted that over 50% of the youth are unemployed or underemployed, and digital platforms have not yet absorbed these numbers into the formal economy (GSS, 2024).
Digital Skills: Another challenge in realizing the full potential of digitalization is the mismatch between available job opportunities in tech and the lack of digital skills among the workforce. Despite initiatives like the “One District One Factory” program and the introduction of tech hubs, Ghana’s education system has not adequately prepared the youth for the growing demand for digital and technical skills (Modern Ghana, 2024). This gap has left many young people unable to take advantage of opportunities in the digital economy.
Exclusion of Key Sectors: While digitalization has brought improvements to certain sectors, particularly finance and e-governance, it has had a less transformative effect on key areas like agriculture, manufacturing, and healthcare. According to GhanaWeb (2024), agriculture, which employs a large portion of the population, still faces challenges such as limited access to digital tools for smallholder farmers, inhibiting productivity gains that could stem from digital interventions like mobile technology for weather forecasting and market access.
2.1.2. Expected impact of a 24-Hour Economy
In contrast to the NPP’s digital-focused approach, the NDC’s proposed 24-hour economic policy seeks to create a more adaptive and continuously operational economic management system. This approach aims to tackle the root causes of economic instability that have hindered growth despite digital advancements.
Decision-Making and Responsiveness: A 24-hour economic policy would ensure that key economic decisions are made continuously, rather than being limited to conventional working hours or reactive crisis management. By creating a team of economic experts working around the clock, the NDC’s policy would facilitate more timely and well-coordinated interventions in areas like inflation management, currency stabilization, and debt restructuring. This approach would be a significant improvement over the current system, where delays in decision-making have contributed to rising inflation and the depreciation of the cedi (GhanaWeb, 2024).
Boost to Investor Confidence: A continuously operational policy framework would foster greater investor confidence, signaling that Ghana is ready to address its economic challenges in real-time. This could attract more foreign direct investment (FDI) by offering a more stable and predictable economic environment. According to the World Bank, Ghana’s FDI has been volatile in recent years, partially due to political and economic instability, and a 24-hour economic policy could help smooth out these fluctuations (World Bank, 2024).
Job Creation through Continuous Economic Growth: One of the key benefits expected from the 24-hour economic policy is its potential to generate more job opportunities. By addressing structural inefficiencies and continuously pursuing economic growth strategies, the NDC believes that the policy will create more stable and sustainable employment in sectors beyond
digitalization, such as agriculture, manufacturing, and infrastructure development. The NDC’s focus on industrialization and creating value-added industries could lead to job creation on a much larger scale than digitalization alone has achieved (Modern Ghana, 2024).
Diversification of the Economy: The NDC’s policy is also designed to reduce Ghana’s dependence on extractive industries like mining and oil, which have been volatile sources of revenue. By continuously implementing economic reforms and prioritizing diversification, including boosting local industries and increasing export capacities, the 24-hour economic policy is expected to provide a more resilient and sustainable economy in the long term.
3. 0. Conclusion
In summary, the NPP’s manifesto has focused on infrastructural expansion and social interventions, such as free senior high school and initiatives to stabilize the economy. However, these efforts have often relied on debt-financed spending, which, coupled with inflation, has diminished the cedi’s value and driven up the cost of living. Additionally, despite promises of job creation and industrialization, the government’s initiatives have yet to create robust economic opportunities for the youth or curb inflationary pressures effectively.
The NDC’s proposed approach on the other hand, suggests restructuring debt through transparent and mutually beneficial arrangements rather than broad austerity measures. It emphasizes diversified industrial growth, investing in job-creating sectors such as agriculture, technology, and green energy. Additionally, the NDC plans to combat corruption with stricter transparency laws and public audits, aiming to rebuild trust and increase resource efficiency. In healthcare, the NDC intends to improve infrastructure and expand access to rural healthcare, prioritizing quality improvements in public services. Finally, to address unemployment, the NDC
suggests reforming educational curricula to align more closely with market needs, ensuring graduates are better prepared for available jobs (World Bank, 2024).
Addressing Ghana’s economic difficulties requires a shift toward sustainable fiscal practices, diversified economic development, and governance reforms. By focusing on these areas, the NDC’s policies if implemented, could potentially offer Ghana a more resilient pathway forward, emphasizing systemic stability over short-term debt relief.
References
Bank of Ghana. (2024). Ghana’s inflationary trends and fiscal challenges. Bank of Ghana.
Ghana Statistical Service (GSS). (2024). Youth unemployment report.
GhanaWeb. (2024). Counting the cost of Ghana’s economic mismanagement.
International Monetary Fund (IMF). (2024). Ghana’s economic performance and IMF
interventions. IMF.
Modern Ghana. (2024). Key Challenges Facing Ghana Today.
World Bank. (2024). Macro Poverty Outlook for Ghana: April 2024 — Datasheet
About the author:
Dr. Philip Takyi (Senior Fellow, Forum for Development and Accountable Governance — FDAG) has over two decades of distinguished expertise in the financial sector, specializing in safeguarding financial assets, compliance, and the integrity of financial systems. With a robust background in corporate governance, risk assessment, fraud prevention, and security protocol implementation, Dr. Takyi has become an industry authority on financial security and digital transformation. As a Member of the Chartered Institute of Bankers (Nigeria) and a Fellow of the Chartered Institute of Leadership and Governance (New Mexico, USA), Dr. Takyi has leveraged global standards to advance public-private partnerships and international development initiatives. He also holds the title of Doctoral Fellow with the Chartered Institute of Financial and Investment Analysts (Ghana) and is a member of the Institute of Directors (Ghana), reflecting a commitment to governance excellence and strategic leadership. Dr. Takyi is a C-level executive skilled in boardroom ethics and people management, having honed these capabilities through a decade of senior leadership roles. As a recognized Trainer of Trainers in financial security awareness, he excels in cultivating secure financial environments. Currently, Dr. Takyi is pursuing an Executive Master’s in Cybersecurity at Ottawa University (USA), complementing a comprehensive academic portfolio that includes an MBA in Finance, a Master of Applied Business Research, a bachelor’s degree in Banking and Finance, and a Doctorate in Business Administration from SBS Swiss Business School (Switzerland).
