The international business services company, Deloitte says economies of both Ghana and Nigeria could take a nose dive this year if stringent measures are not adopted to withstand dangers posed by inflation, currency depreciation and increasing debts in both countries.
Deloitte’s January 2025 Global Economic Outlook indicates that West African country economies have recorded higher interest rates, which has been exacerbated by increasing costs of goods and services.
In view of this, it has become imperative for countries in the region to adopt stringent measures to avert near future economic downturn.
According to its report, in the first half of 2024, Naira depreciated by over 40%, while the Cedi lost more than 20% of its value against the US dollar.
“Nigeria and Ghana have also been grappling with currency volatility, which has severely affected their capacity to import essential raw materials and equipment needed to drive production. In the first half of 2024, the Nigerian naira depreciated by over 40%, while the Ghanaian cedi lost more than 20% of its value against the US dollar.”
Nevertheless, the company has projected some positives for Ghana’s economy in 2025 and 2026. Compared to Nigeria, Deloitte says Ghana has a stronger prospect, stemming especially from measures it has adopted in recent pasts to stage an economic recovery.
Considering all the factors, Ghana is set to record a 5.1% and 5.3% growth in 2025 and 2026 respectively.
“The effects of ongoing pro-market government reforms and debt-restructuring and sustainability initiatives (especially in Ghana) are expected to have started yielding some results, boosting productivity and overall economic output. A more stable domestic currency will also contribute to the projected recovery in these countries.
“Ghana is projected to record a faster pace of growth at 5.1% and 5.3% in 2025 and 2026, respectively. Overall, macroeconomic stability is expected to be gradually restored over the forecast period of 2025 to 2026 in West Africa as these challenges slowly moderate,” it said.
Deloitte added that together with the Ghana government’s fiscal consolidation measures between 2025 and 2026 and its revenue mobilization measures including tax reforms, it forecasts that the measures will “lead to a narrowing of the fiscal deficit as a percentage of GDP from 4.4% estimated in 2024 to 3.9% in 2025 and 3.6% in 2026.”
Thank you for reading from Dehotpress, a Ghanaian news website. You are welcome to share this story on Facebook, Twitter, Instagram, etc., and you can also follow us there.
