Ghana's $10bn trade surplus masks risks of gold dependence – ISSER

Ghana's $10 billion merchandise trade surplus recorded in 2025 was largely driven by gold exports, exposing the economy to fluctuations in international commodity prices and highlighting the need for greater export diversification, the Director of the Institute of Statistical, Social and Economic Research (ISSER), Professor Robert Darko Osei, has cautioned.

He said while Ghana made significant macroeconomic gains during the year, the sustainability of those improvements would depend on strengthening domestic production, expanding manufacturing and increasing value addition.

Prof. Osei made the remarks at the launch of the 2025 State of the Ghanaian Economy Report (SGER), where he warned against relying heavily on gold to sustain the country's external sector performance.

“The position that we have found ourselves in is being driven by a sector that we do not have significant control over,” he said, stressing that favourable gold prices could not be relied upon indefinitely.

He urged the government to use the current period of economic stability to strengthen productive sectors and build adequate external reserves to protect the economy against future shocks.

Gold dominates export earnings

Prof. Osei said the bulk of the trade surplus in 2025 came from gold exports, while the recovery in cocoa exports made a relatively small contribution to the improvement.

He noted that manufactured goods accounted for less than six per cent of total exports in 2025, a decline compared with 2024.

He called for deliberate policies to increase the volume and competitiveness of manufactured exports, arguing that greater domestic processing of natural resources was critical to diversifying the economy.

He also urged Ghana to strengthen its external reserves, warning that the conditions supporting strong gold earnings could change.

High borrowing costs remain a challenge

Despite the improvement in macroeconomic conditions, Prof. Osei said the cost of credit remained a major obstacle to private-sector growth and investment.

He said inflation fell from more than 23 per cent in 2024 to 5.4 per cent in 2025, while the cedi recorded significant appreciation during the year.

Average bank lending rates also declined from more than 30 per cent in 2024 to about 20 per cent in 2025.

However, he said borrowing costs remained too high to enable businesses to compete effectively and expand their operations.

“If credit is a binding constraint for private businesses in Ghana, clearly we cannot be competitive,” he said.

Prof. Osei said the next priority should therefore be to translate monetary stability into affordable financing for productive investments, particularly within the private sector.

Bad loans continue to weigh on lending

He also identified non-performing loans as a persistent challenge for the banking sector despite improvements recorded in 2025.

According to him, the risk of loan defaults forces banks to factor potential losses into their lending rates, making it difficult to reduce borrowing costs further.

Using a 20 per cent non-performing loan rate as an illustration, he said a bank that lends GH¢100 could potentially fail to recover about GH¢20.

He called for sustained measures to address the structural factors behind loan defaults and strengthen the banking sector's capacity to finance productive activities.

ISSER calls for fiscal discipline

On fiscal policy, Prof. Osei urged the government to strengthen domestic revenue mobilisation, maintain fiscal discipline and protect public investment.

He said measures that had contributed to restoring fiscal stability should be institutionalised to prevent a reversal of the gains.

Ghana, he added, must consolidate its macroeconomic improvements while boosting domestic production, increasing manufactured exports and improving access to affordable credit to make the economic recovery more resilient and inclusive.

Mineral wealth must translate into development

The Head of the Economics Division at ISSER, Prof. Fred Dzanku, also expressed concern that increased mining revenues had not consistently resulted in higher public investment or improved social services.

He called for stronger systems for mineral valuation, production monitoring, tax compliance and revenue administration, as well as greater transparency and accountability in the management of mineral revenues.

Prof. Dzanku said Ghana's economic recovery had continued into 2026, although the gains remained uneven.

He noted that first-half growth was reported at about 6.1 per cent but said economic expansion was concentrated in fewer sectors than in the previous year.

He further warned that the country's trade surplus remained heavily reliant on gold receipts, while some other exports were showing signs of deterioration.

He said the trend reinforced the need for Ghana to diversify its economy and reduce its dependence on a narrow range of commodities.

Call for investment and jobs

The Deputy Managing Director in charge of Business and Operations at the National Investment Bank (NIB), Belinda Boamah, urged the government to consolidate the country's macroeconomic gains and translate them into productive investment, competitive businesses and decent jobs, particularly for young people.

In her closing remarks as chairperson of the event, she said Ghana must ensure that its mineral wealth generates lasting development through transparent revenue management, timely transfers to mining communities and savings during periods of favourable commodity prices.

She also called for stronger action against illegal mining and urged financial institutions to use the improved economic conditions to provide affordable, long-term financing to businesses in agriculture, manufacturing and value addition.

Ms Boamah further encouraged policymakers, development partners, the private sector, academia, civil society and the media to use the SGER as an evidence-based resource for policy decisions and accountability.

She said the NIB would continue to draw on research of this nature to guide its lending decisions.