Ghana Raises Growth Forecast as Reform Gains Weather Iran Impact

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(Bloomberg) — Ghana’s economy is growing faster than expected as companies benefit from lower inflation and interest rates, with budget and foreign-exchange reforms helping offset the impact from the war in Iran, Finance Minister Cassiel Ato Forson said.

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Gross domestic product in the world’s second-biggest cocoa producer will expand more than 6% this year, compared with a previous forecast of 4.8%, Forson said in an interview in London on Monday. The country’s main exports of gold and cocoa are doing well, complemented by stronger output in the broader agriculture and services sector, he said.

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“It is the real sector activities in agriculture and services that is actually driving” the better outlook, Forson said. 

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Since coming to power in January 2025, President John Mahama has abolished some taxes to stimulate spending and cut government spending, in addition to establishing a state-run gold-buying company to boost reserves and stabilize the cedi. Inflation has eased to 3.4% from more than 21% a year earlier, while reserves grew to $14 billion at the end of April from about $10.7 billion a year before.

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“The country is in a very healthy position to be able to withstand external shocks,” Forson said.

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The US-Israeli war on Iran has led to a jump in global fuel, food and fertilizer costs. While the conflict will continue to pose headwinds, Forson said he expects inflation to end the year at 5%, lower than the 8% previously projected.

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Double Digits

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Economic growth could accelerate to more than 10% if investments of up to $4 billion materialize from partners in Ghana’s Jubilee oil field, including Tullow Oil Plc and Kosmos Energy LLC, as well as from those working on the Sankofa-Gye Nyame oil and gas reservoir, Forson said.

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The acceleration in Ghana’s growth rate highlights the country’s rapid economic recovery since the West African nation defaulted on its debt in 2022, spurred by the reforms undertaken by Mahama’s administration under a $3 billion International Monetary Fund program.

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With the IMF program scheduled to an end by August, Ghana has requested to move into the fund’s Policy Coordination Instrument, a non-lending arrangement that would help anchor reforms for another three years.

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The framework is expected to focus on halting the build-up of debt at state-owned enterprises, including through greater private-sector participation, and reducing the roughly $2 billion the government spends annually to support the energy industry.

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