Ghana’s economy trapped in stubborn structural weakness— ISSER Fellow lists five key challenges

A Research Fellow at the Institute of Statistical, Social and Economic Research (ISSER), Prof. Charles Ackah, has identified five persistent structural weaknesses that have kept Ghana’s economy from achieving meaningful transformation over the past 65 years, despite alternating political leadership.

Speaking on Channel One TV’s The Point of View, Prof. Ackah said successive administrations from both the New Patriotic Party (NPP) and the National Democratic Congress (NDC) have failed to address the country’s deep-rooted economic challenges . He identified persistent inflation, dependence on primary commodity exports, underperforming agriculture, a weak manufacturing sector and slow industrialisation as the country’s major setbacks .

High Inflation a ‘Stubborn’ Reality

According to Prof. Ackah, Ghana has consistently recorded high inflation over the decades despite the Bank of Ghana’s efforts to maintain price stability.

“Whether it is the NPP or the NDC, over the last 65 years, it has been chronically established,” he said. “When you look at the data, the first one is inflation. We are among the economies with high inflation over 65 years despite all that the central bank has been doing. We are a high-inflation economy, and it is stubborn” .

The data supports his assertion. A parliamentary statement on monetary policy noted that between 2021 and 2023, the Bank of Ghana raised its policy rate significantly, yet inflation surged from 9.94 per cent to 40.28 per cent during the same period . This paradoxical outcome, some analysts argue, stems from Ghana’s inflation being largely cost-push rather than demand-driven, making monetary policy adjustments less effective .

Trapped in Primary Commodity Exports

Prof. Ackah further argued that Ghana’s export structure has changed little in six decades, with the country continuing to rely heavily on primary commodities such as gold, timber, bauxite, manganese and crude oil. This dependence, he said, exposes the economy to global price fluctuations, making export earnings unpredictable .

Recent data confirms this. The Ghana Statistical Service reported that gold alone accounted for nearly 63 per cent of total exports in 2025, with cocoa beans and mineral fuels making up another significant portion. Together, these three commodity groups accounted for approximately 86 per cent of export earnings . Such a narrow export base leaves Ghana highly vulnerable to commodity price shocks — a fragility that has played out repeatedly over the decades .

Agriculture and Manufacturing: A Broken Union

The ISSER Fellow drew a vivid analogy to illustrate the relationship between agriculture and manufacturing.

“Manufacturing and agriculture are like husband and wife. Once agriculture fails, manufacturing cannot take off,” he stated .

He explained that agriculture provides both the raw materials and the purchasing power needed to sustain manufacturing. Weaknesses in the agricultural sector, he noted, force manufacturers to import inputs at higher costs, reducing their competitiveness and causing low factory utilisation and business closures . Ghana spends over $2 billion annually on food imports despite possessing vast agricultural potential, and only five per cent of arable land is irrigated . This paradox, experts note, reflects a failure to achieve food self-sufficiency and a lack of value-addition infrastructure .

Manufacturing Stagnation and Slow Industrialisation

Ghana’s manufacturing sector has contributed roughly 12 per cent to GDP for decades, with capacity utilisation averaging only 42 to 46 per cent . This stagnation has been driven by multiple constraints, including inadequate infrastructure, unreliable energy supply and high borrowing costs. Interest rates for manufacturers in Ghana are 15 to 20 percentage points higher than in competing countries, making expansion difficult .

Prof. Ackah identified slow industrialisation as another major obstacle to long-term transformation, calling for policies that address these structural weaknesses rather than short-term fixes .

Expert Warnings and Policy Implications

Prof. Ackah’s analysis aligns with earlier warnings from the World Bank, which noted that Ghana’s economy is failing to generate enough high-quality jobs in productive sectors, limiting growth opportunities . The World Bank has also highlighted the country’s “minimal structural transformation” over the past decade, with agriculture still employing a significant share of the workforce despite low productivity .

ISSER has previously cautioned that structural risks in the economy, including declining capital expenditure and infrastructure deficits, could undermine growth prospects if not urgently addressed . In the energy sector, for instance, transmission and distribution losses remain as high as 27 per cent, a significant drain on fiscal resources that undermines industrial competitiveness .

‘Only 1.15% Per Capita Growth’

This latest intervention comes just days after Prof. Ackah revealed that Ghana’s average annual per capita GDP growth over 65 years stands at just 1.15 per cent. He warned that maintaining such a trajectory would delay Ghana’s transition from a lower-middle-income country to an upper-middle-income one by up to 70 years. Comparing Ghana with countries like China (6.6 per cent) and Botswana (4.77 per cent), he underscored the urgent need for sustained structural reforms .

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