Sustained 6.5% growth needed to unlock transformation – World Bank            

By Joshua Worlasi AMLANU

The nation must sustain annual growth above 6.5 percent through sweeping fiscal and structural reforms to triple incomes by 2050 and avoid falling into the middle-income trap, according to the World Bank.

In its 2025 Policy Notes report, ‘Transforming Ghana in a Generation’, the Bank said productivity, infrastructure and skills development will be decisive for long-term growth. Without bold action, the country risks repeating cycles of fiscal crises that have already triggered 17 IMF programmes since independence.

The report noted that Ghana’s per capita income has stagnated at around                          US$2,200 for the past decade, with poverty still affecting more than a quarter of the population. Economic and social prospects weakened after a severe crisis in 2022, which was  preceded by rising imbalances and debt accumulation. Between 2012 and 2023 only 250,000 net jobs were  created, most of them in low-productivity sectors.

“Ghana has a unique opportunity to restore fiscal discipline, improve governance and leverage natural and human capital resources for broad-based and inclusive development,” said Robert Taliercio, World Bank Division Director for Ghana, Liberia and Sierra Leone.

Sustaining high growth, he added, requires Ghana to follow the example of countries that have maintained stability, low inflation and sound public finances.

The Bank outlined four foundations for transformation: restoring macro-financial stability, raising productivity and competitiveness, ensuring sustainable resource management and strengthening governance. The first priority is fiscal consolidation through stronger revenue collection and better expenditure controls, while advancing reforms in energy and cocoa.

The energy sector remains a major fiscal risk. Government transfers to cover financial shortfalls cost US$1.4billion in 2024 and are projected rising to                    US$2billion by 2026, equivalent to two percent of GDP. Delays in reforms, the Bank warned, will crowd out spending on health, education and infrastructure. In the cocoa sector, COCOBOD’s operational inefficiencies and debt accumulation continue to weigh on public finances.

Tax collection also lags behind potential. Ghana raised revenue equal to 13 percent of GDP in 2021, well below its estimated capacity of 21 percent and below the sub-Saharan Africa average. Revenue in first-half 2025 reached 7.1 percent of GDP, falling short of the 7.3 percent target.

Stefano Curto, the Bank’s Lead Economist for Ghana, Liberia and Sierra Leone, said the country must act decisively to unlock inclusive growth.

“The choices Ghana makes now can deliver sufficient quality jobs for its citizens. The World Bank stands ready to support Ghana’s leadership,” he said.

The report highlighted lowering the cost of financing’s importance – by relying more on concessional loans rather than expensive domestic borrowing. Domestic T-bills carried average interest rates of 27.4 percent in 2023-24 compared with International Development Association financing at 0.75 percent to two percent. Even with rates declining to 11.9 percent in September 2025, concessional terms remain more favourable.

Ghana’s transformation, the Bank said, will require credible governance reforms to build public trust. Strengthening institutions and improving transparency are seen as critical to breaking from a history of fiscal indiscipline and IMF dependence.

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