Accra Street Journal Analysis The World Bank assessment of Ghana's economic outlook

The World Bank has delivered a sobering assessment of Ghana's economic outlook, warning that prolonged Middle East tensions could undermine the country's hard-won macroeconomic stability. According to the Bretton Woods institution's 10th Ghana Economic Update Report, titled "Reset for Growth: Sustaining Macroeconomic Recovery and Unlocking Transport for Transformation," Ghana's status as an oil producer and major gold exporter may offer some cushion, but prolonged global trade disruptions from the conflict could weigh heavily on macro-financial stability.

The Bank noted that externally, gold price volatility, geoeconomic fragmentation, and the Middle East conflict—which elevates energy, food, and agricultural input costs—are the primary concerns that could weigh on potential growth, erode fiscal revenues, and drive inflationary and exchange rate depreciation pressures .

Despite these risks, the World Bank projects that Ghana will end 2025 with a growth rate of 4.8%, stating that the "medium-term outlook is broadly positive, though growth is expected to moderate" . Over the medium term, growth is expected to converge toward its estimated potential of around 5%. Inflation is expected to remain within the Bank of Ghana's 8 ± 2% target band, while the current account is projected to remain in surplus in 2026. The primary surplus target of 1.5% of Gross Domestic Product is achievable, provided revenue reforms are implemented as planned.

However, according to Accra Street Journal's analysis , the World Bank cautioned that "These projections are achievable—but they are not guaranteed, and the downside risks to this outlook are material" . The Bank warned that policy slippages in the energy and cocoa sectors, along with fiscal pressures from extending temporary relief measures such as fuel price interventions, could erode recent macroeconomic gains and jeopardize debt sustainability objectives . It also noted that increasing debt service payments in 2027–2028 pose rollover risks given the reliance on short-term debt instruments, though the reopening of the domestic bond market in April 2026 is expected to ease these pressures with longer-maturity instruments.

Policy Recommendations

To manage these risks, the World Bank outlined several policy priorities. On the revenue front, the Bank emphasized that the domestic revenue mobilization agenda is central to fiscal sustainability, noting that the primary surplus has largely been achieved through underspending rather than broad-based revenue growth . The reform priority, therefore, is to broaden the tax base, improve compliance, and build a tax administration system capable of capturing revenues from all segments of the economy fairly and equitably.

On expenditure quality, the Bank acknowledged policy actions introduced in 2025 to bring fiscal consolidation back on track, including amendments to the Public Financial Management and Public Procurement Acts aimed at strengthening commitment controls and preventing future slippages . However, the World Bank warned that repeated compression of capital investment, infrastructure maintenance, and social transfers risks eroding the medium-term foundations of the recovery. Priority must be placed on safeguarding high-return public investment, preserving priority social spending, and strengthening PFM to improve efficiency—recognizing that fiscal discipline and growth-supportive expenditure are complementary objectives.

The Bank also called for developing a more robust fiscal risk architecture covering systematic disclosure of contingent liabilities, integrating risk scenarios into budget planning, and strengthening State-Owned Enterprise accountability mechanisms

Source Used: Accra Street Journal - Business