Ghana’s economic performance in the first eight months of 2025 showcased remarkable resilience and growth, driven by a robust external sector and prudent fiscal management. The country achieved a significant trade surplus of US$6.2 billion, primarily fueled by strong gold exports and increased cocoa earnings. This positive trade balance contributed to a bolstering of Ghana’s external buffers, with gross international reserves reaching US$10.7 billion by August, providing import cover for approximately 4½ months. The cedi’s performance against other global currencies was particularly noteworthy, appreciating by around 21 percent year-to-date as of September 12th. This impressive performance placed the cedi among the top-performing currencies worldwide, alongside the likes of the Russian ruble, Swedish krona, Norwegian krone, Swiss franc, euro, and British pound.
The cedi’s strength can be attributed to a combination of factors, including effective monetary policy implemented by the Bank of Ghana, sound liquidity management practices, ongoing fiscal consolidation efforts, and increased inflows of foreign exchange. Despite facing seasonal pressures and a temporary dip in remittance inflows, the cedi maintained its robust position, underpinned by the healthy level of international reserves. This stability provides a solid foundation for economic activity and reinforces confidence in the Ghanaian economy. The remarkable performance of the cedi not only reflects sound economic management but also contributes to overall macroeconomic stability, reducing import costs and promoting investor confidence.
While the external sector thrived, the domestic financial landscape presented a mixed picture. The capital base of financial institutions strengthened, with the capital adequacy ratio, excluding regulatory reliefs, rising to 19.5 percent in July. This indicates improved resilience within the banking sector and enhanced capacity to absorb potential shocks. However, non-performing loans remained a challenge, standing at 21.7 percent. This persistent issue underscores the need for continued efforts to address credit risk and improve asset quality within the financial system. Despite this challenge, the overall strengthening of the capital base provides a positive outlook for the long-term stability and health of the financial sector.
On the fiscal front, the government demonstrated commitment to consolidation, achieving a deficit of 0.7 percent of GDP on a commitment basis in the first half of 2025. This outperformance against the target reflects disciplined spending and effective revenue mobilization. Combined with the cedi’s strength and the successful restructuring of external debt, the fiscal consolidation efforts contributed to a decline in the public debt ratio by mid-year. This improved fiscal position enhances Ghana’s debt sustainability and creates fiscal space for future investments in critical sectors such as infrastructure, education, and healthcare. The prudent fiscal management demonstrates the government’s commitment to long-term economic stability and sustainable development.
The Bank of Ghana reaffirmed its commitment to maintaining price stability, safeguarding financial stability, and fostering inclusive, sustainable growth. Acknowledging the dynamic nature of the global economic landscape, the Bank expressed its readiness to adapt its policies as the disinflation process unfolds and potential risks, such as global trade disruptions or prospective utility tariff adjustments, are assessed. This proactive approach ensures that the Bank remains responsive to evolving economic conditions and can effectively mitigate potential risks to the economy. The Bank’s commitment to price stability aims to control inflation and maintain the purchasing power of the cedi, while its focus on financial stability ensures the soundness and resilience of the financial system.
In summary, Ghana’s economic performance in the first eight months of 2025 presented a positive narrative of growth, resilience, and prudent management. The strong external sector performance, driven by robust gold and cocoa exports, contributed to a substantial trade surplus and strengthened external buffers. The cedi’s impressive appreciation against global currencies underscored the effectiveness of monetary policy, fiscal consolidation, and improved investor confidence. While challenges remain in the domestic financial sector, particularly with regard to non-performing loans, the strengthening of the capital base provides a positive outlook for long-term stability. The government’s commitment to fiscal consolidation has yielded positive results, contributing to a decline in the public debt ratio. The Bank of Ghana’s proactive stance and commitment to maintaining stability while fostering growth provides assurance of continued sound economic management.
