“The economy is recovering, but we’re not there yet”

Dr. Owusu Sarkodie, a senior lecturer and economist at the University of Ghana, Legon, has stated that Ghana’s economy is showing signs of recovery but is far from fully rebounding.

Speaking on ABC News on Friday, he explained that “this economy is recovering; it is not broke, neither is it strong.”

Dr. Sarkodie contextualized Ghana’s economic trajectory, highlighting how restricted access to the capital market in 2020 triggered a cascade of economic challenges, including a depreciating cedi, high inflation, and fiscal deficits that necessitated government borrowing and an eventual IMF bailout.

Comparing the present economic indicators to the pre-COVID-19 era, Dr. Sarkodie noted a mixed outlook.

“GDP growth, which averaged 7% around 2017 to 2019, is now at 3-4%. Inflation, which peaked at 54% last year, has come down to 23%. While these figures are an improvement over 2022, they are far from the pre-pandemic highs.”

Dr. Sarkodie pointed out that depleted reserves, a key driver for the IMF program, are gradually being rebuilt, but the economy still has a long way to go before regaining its former strength.

Acknowledging the significant strides made since 2022, Dr. Sarkodie cautioned against premature celebrations of recovery.

“We are recovering, but we have not recovered fully. The gains are notable but not yet sufficient to match pre-pandemic levels of economic strength.”

Dr. Sarkodie’s comments come in the wake of President Nana Akufo-Addo’s final State of the Nation Address, where the President expressed confidence in Ghana’s economic rebound.

He emphasized the government’s efforts in restoring stability and declared that he was leaving behind “a Ghana that is working.”