GHANA’S ECONOMIC GROWTH: A COMPARATIVE ANALYSIS FROM 2016 TO SEPTEMBER 2024

By Nana Asare Baffour:

Economic growth is a key determinant of a nation’s progress, as it directly influences the government’s ability to generate higher tax revenues, fund critical public services, and elevate the standard of living. Ghana’s recent economic trajectory is evidence of the impact of government policy on national development. Under the New Patriotic Party (NPP) government, led by Nana Addo Dankwa Akufo-Addo and Vice President Dr. Mahamudu Bawumia, the nation has experienced significant shifts in economic growth compared to the National Democratic Congress (NDC) administration under former President John Dramani Mahama. This article explores Ghana’s economic growth between 2016 and 2024, highlighting the transformative effects of key policies and the overall management of the economy.
THE STATE OF GHANA’S ECONOMY IN 2016
In 2016, Ghana’s economy was growing at a modest rate of 3.4%, a significant drop from the higher growth rates recorded in earlier years. The NDC administration, under John Mahama, faced challenges such as high inflation, a depreciating currency, and a significant budget deficit. The NDC’s handling of these challenges was heavily criticized by the opposition NPP, which argued that poor economic management had led to stagnation in growth and deterioration in public services.
NPP’S ECONOMIC REFORMS: 2017 – 2020
When the NPP government came to power in January 2017, it inherited an economy marked by high debt, high unemployment, and low investor confidence. However, under the leadership of President Akufo-Addo and the economic expertise of Vice President Dr. Bawumia, the NPP government swiftly introduced a range of economic reforms aimed at revitalizing the economy. These reforms included:
Stabilizing the Macroeconomic Environment: Through prudent fiscal management, the government reduced inflation from double digits to a more manageable level. Inflation, which was at 15.4% in 2016, was brought down to around 7.9% by 2020.
Ghana Beyond Aid Agenda: This policy sought to reduce Ghana’s dependency on external aid by focusing on strengthening domestic production, increasing exports, and improving the business environment.
Industrialization Policies: The “One District, One Factory” initiative was launched to boost industrialization and job creation. The government also invested in agriculture through initiatives like the “Planting for Food and Jobs” program.
These reforms yielded positive results. By 2017, Ghana’s GDP growth rate had surged to 8.1%, positioning the country as one of the fastest-growing economies in Africa. The economy continued to grow at an average rate of 6-7% over the next few years, with sectors like agriculture, services, and industry showing significant improvements.
IMPACT OF THE COVID-19 PANDEMIC
The COVID-19 pandemic in 2020 posed an unprecedented challenge to economies worldwide, and Ghana was no exception. The economic slowdown caused by the pandemic resulted in a contraction of growth, as key sectors such as tourism, trade, and hospitality were adversely affected. Nevertheless, the NPP government’s swift response to the crisis, including stimulus packages for businesses, tax waivers, and the digitization of financial services, helped mitigate the impact.
Despite the pandemic, Ghana’s economy displayed resilience, growing at 0.4% in 2020 compared to contractions in many other African countries. This was a testament to the robust economic management of the NPP government during a period of global uncertainty.
POST-PANDEMIC RECOVERY: 2021 – 2024
Following the global economic recovery, Ghana’s economy began to rebound in 2021. The government focused on boosting sectors that had been hardest hit, such as trade, services, and agriculture while continuing its industrialization agenda. The GDP growth rate climbed to 5.4% in 2021 and remained relatively stable in 2022.
In 2023, the economy recorded a growth rate of 4.8% in the first quarter, followed by a stronger performance in 2024. By the second quarter of 2024, Ghana’s economy had grown by 6.9%, a notable improvement from the 4.3% growth recorded in the first quarter. These figures reflect the NPP’s continued focus on economic diversification, industrialization, and improving the ease of doing business.
COMPARISON WITH NDC’S ECONOMIC MANAGEMENT
The stark difference between the NPP and NDC administrations is evident in their respective approaches to economic management. Under the NDC’s Mahama-led government, Ghana’s economic growth slowed, and the country grappled with high inflation, rising debt, and limited fiscal space. On the other hand, the NPP government’s ability to not only stabilize the economy but also implement transformative policies underscores its effectiveness in managing the economy.
By the time the NPP took over in 2017, Ghana was in dire need of reforms, and the government’s commitment to achieving macroeconomic stability, industrialization, and digitization had paid off. The digital transformation of the economy, including initiatives such as the mobile money interoperability system, the introduction of the Ghana Card, and e-tax filing, has made significant contributions to revenue generation and improved efficiency in public service delivery.

THE WAY FORWARD: SUSTAINING ECONOMIC GROWTH
As Ghana moves beyond 2024, some key opportunities and challenges will define the nation’s economic trajectory. The ongoing focus on industrialization, agriculture, and digital transformation will be critical to sustaining high growth rates. Additionally, fiscal discipline and efficient resource management will be essential to avoid the pitfalls of unsustainable debt accumulation.
The NPP government’s track record in managing the economy speaks volumes about its capability to navigate challenges and capitalize on opportunities. As the country approaches the 2024 elections, the comparative economic performance of the NPP and NDC will undoubtedly play a crucial role in determining the future leadership of Ghana.
Ghana’s economic growth story from 2016 to 2024 is one of resilience, strategic planning, and effective governance. The transition from a 3.4% growth rate under the NDC to a robust 6.9% growth in 2024 under the NPP government demonstrates the impact of sound economic management. While challenges remain, the future looks promising for Ghana, with the right policies in place to sustain growth and improve the lives of its citizens.
The NPP has proven to be a capable steward of the economy, driving transformation and enhancing public services, and it remains poised to continue this legacy.