Ghana’s economy shows great resilience – Standard Bank

Jibran Qureishi

The Standard Bank Group has expressed optimism about Ghana’s economic indicators, citing signs of recovery and resilience.

The bank’s Head of Africa Regions in charge of Economics Research, Jibran Qureishi, said despite the challenges posed by the COVID-19 pandemic and the Russia-Ukraine crisis, Ghana’s economy had shown remarkable strength, outperforming many of its African peers.

According to him, Ghana’s GDP growth has been revised to 3.1% from 2.8%, driven by increased gold production and external debt restructuring.

He noted that this positive trend is a testament to the country’s ability to navigate complex economic challenges.
Mr. Qureishi made these observations when discussing the Mid-Year Budget Review with Stanbic Bank Ghana clients and customers in Accra.

He indicated that one of the key factors contributing to Ghana’s economic resilience is its strategic debt restructuring, adding that the timely completion of external debt restructuring has restored macroeconomic stability, preventing further depreciation of the Ghanaian cedi.

For him, this move has also allowed Ghana to maintain a current account surplus, driven by reduced debt servicing and a decline in imports due to high inflation and interest rates.

He argued that in contrast, many other African nations, such as Uganda, Malawi, Zambia, and Ethiopia, had struggled to return to pre-pandemic economic growth levels due to debt challenges.

Ghana’s ability to adapt and respond to these challenges has set it apart from its peers, the Standard Bank Group Africa boss posited.

He, however, indicated that the report also noted that the current account surplus is expected to decrease as imports rise with falling inflation.

Mr. Qureishi said this could potentially lead to a current account deficit by late 2025 or early 2026, but quickly added that these, notwithstanding, are a manageable risk, and Ghana’s economic fundamentals remain strong.
He also noted that the fiscal deficit had been revised down to 4.2% of GDP from 4.8%, driven by optimistic revenue collection expectations.

He said this reduction is partly due to lower external debt amortization, allowing for increased net foreign financing.

To sustain this recovery, he suggested that the government must focus on stimulating interest and liquidity in the domestic bond market to support economic activity.

The economist stated that Ghana’s mid-year budget review presents a mixed picture, but the overall trajectory is cautiously optimistic.

He pointed out that the nation’s recovery is sustained by strategic debt restructuring, robust export sectors, and international financial support.

Maintaining fiscal discipline and advancing a conducive environment for investment and economic growth are crucial for sustaining this recovery, he intimated.

According to him, as Ghana navigates these challenges, the commitment to sound economic policies and structural reforms will be key to securing a stable and prosperous future.

He reiterated that the country’s ability to adapt and respond to complex economic challenges has been impressive, and with continued prudent management, Ghana’s economy is poised for sustained growth and development.

By Ernest Kofi Adu

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