World Bank: Stronger Governance, Energy Reforms Key to Ghana’s Future

The World Bank has launched its 2025 Policy Notes report titled “Transforming Ghana in a Generation,” setting out a roadmap of urgent reforms to restore economic stability, create jobs, and build inclusive prosperity.

The report highlights that Ghana could sustain annual growth rates above 6.5 percent, triple its per capita income by 2050, and significantly reduce poverty if bold and consistent policies are implemented.

Over the past decade, Ghana’s economic progress has slowed despite strong performance in earlier years. Between 2009 and 2019, the country averaged 6.8 percent annual growth and halved poverty levels, but rising macroeconomic imbalances led to a severe crisis in 2022.

Robert Taliercio, the World Bank Country Director for Ghana, Liberia, and Sierra Leone, highlighted at the launch of the World Bank’s 2025 Policy Notes in Accra that income per capita has remained stagnant at around US$2,200. He also pointed out that over a quarter of the population lives in poverty, with regional disparities continuing to worsen.

“Ghana has a unique opportunity to restore fiscal discipline, improve governance, and leverage its natural and human capital for inclusive development. But it must act decisively to avoid the middle-income trap and sustain growth,” he said.

Four Pillars for Transformation

The Policy Notes identify four critical foundations to drive Ghana’s long-term transformation.

The first is restoring macro-financial stability. This will require stronger revenue mobilization, disciplined public spending, and urgent reforms in the energy and cocoa sectors.

The energy sector alone cost the government US$1.4 billion in transfers in 2024, and this figure could rise to US$2 billion by 2026 if reforms are not expedited.

The second foundation is boosting productivity and creating jobs. This calls for increased investment in education, health, and social protection to build human capital, as well as addressing barriers to private sector growth.

Currently, registering a business takes 57 days for local firms and 67 days for foreign firms in Ghana, compared to just 28 days in Morocco. Court litigation can also last up to 900 days in Ghana, far longer than the 225 days in Côte d’Ivoire, posing challenges to business competitiveness.

The third pillar is sustainable natural resource management and resilience. Expanding climate-smart agriculture, strengthening agribusiness, and investing in resilient infrastructure are necessary to protect the environment, safeguard livelihoods, and diversify sources of growth.

The fourth foundation is reinforcing governance and institutions. Stronger transparency, anticorruption measures, and public sector reforms are vital to rebuilding trust, improving efficiency, and ensuring that policy decisions translate into real development outcomes.

Financing and Growth Prospects

The World Bank also urged Ghana to prioritize concessional financing over costly domestic borrowing.

For instance, while Treasury bills averaged 27.4 percent interest in 2023–2024, International Development Association (IDA) loans offer far lower rates of around 1.5 percent, making them a more sustainable option for development financing.

Stefano Curto, Lead Economist for Ghana, Liberia, and Sierra Leone and lead author of the report, emphasized the urgency of reform.

“The choices Ghana makes now can unlock a generation of inclusive, resilient growth and deliver on the promise of quality jobs for its citizens. The World Bank Group stands ready to support Ghana’s leadership and the efforts of all stakeholders to make that promise real,” he said.

The report also notes that government flagship programs such as the 24-Hour Economy and the Big Push could help catalyze transformation if implemented effectively and aligned with broader reform priorities.

Finance Ministry Reaffirms Commitment

Mr. Samuel Arkhurst, Director of the Real Sector Division at the Ministry of Finance, speaking on behalf of the Minister of Finance, reaffirmed government’s commitment to sustaining economic recovery and advancing Ghana’s long-term development goals, stressing that the World Bank’s Policy Notes provide a strong foundation for shaping the country’s future.

Mr. Arkhurst reflected on Ghana’s journey since independence, recalling Dr. Kwame Nkrumah’s words in 1957 that progress should be measured by improvements in health, education, infrastructure, and the overall welfare of citizens.

He noted that while Ghana has achieved milestones, it has also experienced missed opportunities and recurring challenges.

He highlighted recent progress in stabilizing the economy following the debt restructuring, citing a robust second-quarter GDP growth rate of 6.3 percent, reduced inflation at 11.5 percent, and a projected debt-to-GDP ratio of 43.8 percent by the end of 2025.

“Recovery is in sight, but this does not mean the Ministry of Finance will go to sleep. We are committed to addressing structural challenges, particularly in energy and tax mobilization, to secure sustainable growth for the next generation,” he stated.

Mr. Arkhurst also underscored the impact of Ghana’s rapid population growth from 6 million at independence to over 30 million today on infrastructure and social services. Nonetheless, he emphasized Ghana’s resilience, referencing the country’s transition to lower-middle-income status as proof of its ability to overcome obstacles.

ACET’s Dr. Edward K. Brown Urges Stronger Policy Linkages for Ghana’s Transformation

Dr. Edward K. Brown, Senior Director at the African Center for Economic Transformation (ACET), has urged Ghana to strengthen the linkages between macroeconomic stability, structural reforms, and sustainable development to secure lasting growth.

According to Dr. Brown,  stability in itself was not enough and must translate into policies that support small and medium-sized enterprises (SMEs), infrastructure, and job creation.

“Macroeconomic stability must underpin structural change. Fiscal tools should incentivize SMEs, drive infrastructure development, and ensure continuity for sustainable growth,” he noted.

He warned that inefficiencies in the energy sector alone drain about US$1.2 billion annually, undermining stability. On cocoa, he cautioned that Uruguay could soon overtake Ghana as the world’s second-largest producer, stressing the need for greater value addition.

Dr. Brown further described illegal mining as an existential threat, pointing to evidence of crop contamination in mining-affected communities.

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On recent tariff proposals by power companies, some exceeding 180 percent, he argued that price hikes were not a sustainable fix. “The priority must be stopping the leakages and ensuring efficiency in the energy sector. Without that, macroeconomic stability cannot be sustained,” he said.

He concluded that Ghana’s transformation will depend on coherent fiscal, monetary, and structural policies anchored by strong institutions and continuity.

The event, held in collaboration with the World Bank, sought to diagnose Ghana’s economic trajectory and outline strategies to position the nation for sustainable development in the coming decades.

Source: Isaac Kofi Dzokpo