Ghana’s Current Macroeconomic Stability Is Not Novel

Evidence from official data published by the Ghana Statistical Service, Bank of Ghana, IMF and World Bank shows that every change of government in the Fourth Republic has been followed by some degree of macroeconomic stabilisation, with 6 key indicators thus price, the currency, economic growth, public debt, the fiscal balance and foreign exchange reserves generally improving under the incoming administration.

This improvement has largely been associated with fiscal consolidation, greater fiscal discipline and efforts to reduce public debt, another important factor is that public expectations and pressures on a new administration are initially lower, giving it greater room to implement stabilisation measures.

This analysis examines 4 distinct political eras under the Fourth Republic, focusing on the first full calendar year of 4 successive administrations: the John Agyekum Kufuor administration in 2001, the John Evans Atta Mills administration in 2009, the Nana Addo Dankwa Akufo Addo administration in 2017, and the John Dramani Mahama administration in 2025.

Across these 4 periods, 6 key macroeconomic indicators are assessed: inflation, real GDP growth, cedi performance against the US dollar, gross international reserves measured in months of import cover, fiscal balance, and public debt as a percentage of GDP.

The objective is to compare macroeconomic conditions at the beginning of each administration and examine the extent to which early economic stabilisation or improvement occurred across these distinct eras, using 6 indicators.

1. John Agyekum Kufuor Era: 2000 to 2001

Verdict: The first year recorded substantial stabilisation in inflation, currency performance, growth and the fiscal balance, while public debt continued to rise.

Inflation fell from 40.5% in 2000 to 21.3% in 2001. Real GDP growth increased from 3.7% to 4.2%, while the cedi’s depreciation slowed from approximately 50.0% to 3.5%. Gross international reserves rose from about 1.0 to 1.2 months of import cover. The fiscal deficit narrowed from 9.7% to 6.8% of GDP. Public debt, however, increased from 132.8% to 146.3% of GDP, showing that early stabilisation did not immediately reduce the debt burden.

2. John Evans Atta Mills Era: 2008 to 2009

Verdict: Despite the global financial crisis, inflation, the pace of currency depreciation and the fiscal balance improved, while growth and reserve adequacy weakened.

Inflation declined from 18.1% in 2008 to 16.0% in 2009. Real GDP growth slowed from 8.4% to 4.0% amid a difficult global economic environment. The cedi’s depreciation eased from approximately 20.6% to 14.8%, while gross international reserves fell from 2.2 to 0.7 months of import cover. The fiscal deficit narrowed from 8.5% to 5.8% of GDP, although public debt increased from 30.1% to 32.7% of GDP under the selected historical series. The outcome was mixed, but some indicators improved despite the external shock.

3. Nana Addo Dankwa Akufo Addo Era: 2016 to 2017

Verdict: The first year delivered a remarkable broad based turnaround, with improvement across five indicators and public debt remaining broadly stable.

Inflation declined from 15.4% in 2016 to 11.8% in 2017. Real GDP growth more than doubled, rising from 3.7% to 8.1%. The cedi’s depreciation slowed from 9.6% to 4.9%, while gross international reserves increased from 3.5 to 4.3 months of import cover. The fiscal deficit narrowed from 7.3% to 4.7% of GDP. Public debt edged up from 57.1% to 57.3% of GDP, remaining broadly stable. The six indicators therefore show broad improvement, although debt did not decline.

4. John Dramani Mahama Era: 2024 to 2025

Verdict: Macroeconomic stabilisation accelerated markedly in 2025 across the six selected indicators, alongside substantial financial losses recorded by the Bank of Ghana.

Inflation fell from 23.8% in 2024 to 5.4% in 2025. Real GDP growth increased from 5.8% to 6.0%, while the cedi moved from a 19.2% depreciation in 2024 to a 40.7% appreciation in 2025. Gross international reserves rose from 4.0 to 5.7 months of import cover. The overall fiscal deficit narrowed from 7.9% to 1.0% of GDP on a commitment basis, while public debt declined from 61.6% to 44.7% of GDP under the selected series.

The Bank of Ghana’s 2025 financial statements report a loss of GH¢15.63 billion in its profit and loss account and a total comprehensive loss of GH¢34.95 billion. The total comprehensive loss includes the profit and loss deficit, so the two figures must not be added together. The GH¢34.95 billion total comprehensive loss is the appropriate combined measure of the Bank’s overall reported financial performance, including other comprehensive income movements. These accounting and balance sheet outcomes should be distinguished from the macroeconomic indicators themselves.

Conclusion: Macroeconomic Stability Is a Means to an End

The four transitions point to a recurring pattern of early macroeconomic stabilisation following changes of government in the Fourth Republic. Inflation and currency performance improved in all four selected first years, while fiscal balances also improved under the series used here. Growth, reserves and debt followed different paths, underscoring that the pattern is recurring but not uniform. The evidence therefore supports a measured conclusion: early macroeconomic stabilisation is not new to Ghana’s Fourth Republic.

Macroeconomic stability, however, is a means to an end, not the end itself. An economy cannot be judged solely by lower inflation, currency appreciation, rising reserves, fiscal consolidation or a declining debt ratio. These conditions matter because they should create room for productive investment, economic transformation and improved living standards.

The ultimate test is whether stability translates into sustainable job opportunities, quality education, accessible healthcare, stronger agricultural investment, industrial expansion, digitalisation, higher productivity and improved household incomes. That is a further layer of analysis beyond the scope of this article, which has focused specifically on six macroeconomic indicators. The policy objective must be to turn macroeconomic stability into tangible gains for citizens.

Data were sourced from the IMF, World Bank, Ghana Statistical Service, Bank of Ghana and Ministry of Finance.

About the Author
Abonenga Joseph Aguyire is an Economic Policy and Development Strategist, social commentator and political activist.

Email: [email protected]