The World Bank is skeptical about Ghana’s capacity to achieve upper-middle-income level by 2037-2040 and high-income status by 2057.
The economy has become more reliant on natural resource exploitation, according to the Bretton Woods institution, while development in other areas has halted.
Though it stated in its October 2022 Country Climate and Development Report that Ghana has made significant progress over the last three decades, poverty reduction and job growth have stagnated, and 70% of jobs are still informal.
The World Bank is skeptical about Ghana’s capacity to achieve upper-middle-income level by 2037-2040 and high-income status by 2057.
“Ghana has achieved significant development over the last three decades, and the country’s leadership has lofty goals for the future.” Between 1998 and 2016, GDP per capita more than doubled, while poverty rates more than halved. Moving forward, the country’s leadership has outlined a development vision centered on three key priorities: rapid growth and job creation, supported by industrialization, economic diversification, and leveraging trade and global integration, universal access to essential services, and digital development to support innovation, productivity growth, and service delivery. However, the future trajectory is becoming increasingly unpredictable.”
Furthermore, the research stated that despite measures to improve access to vital infrastructure such as power and communications, as well as public services, notably education, Ghana has not completely converted its natural richness into enough infrastructural, human, and institutional capital. When compared to the performance of ten other West African nations, Ghana ranks second to last in the quality of road infrastructure ranking.
Debt sustainability is a serious issue.
Ghana attempted to fuel its growth by leveraging markets, however the World Bank also stated that debt sustainability is a worry, which is exacerbated by crises.
“The COVID-19 pandemic resulted in a steep growth slowdown and substantial budgetary hardship, as well as significant structural weakness, as indicated in the economy’s poor diversification and high sensitivity to commodity cycles.”
It went on to say that debt vulnerabilities and financing constraints have increased, with the debt-to-GDP ratio rising from 63 to 83% between 2019 and 2021, and sovereign spreads on Ghana’s sovereign debt on international markets widening to the point where Eurobond issuances are no longer an option.