Ghana’s economic troubles existed before COVID-19 – Financial Analyst

Finance analyst, Richmond Eduku, says Ghana’s economic troubles predated COVID-19, pointing to deep structural weaknesses long before the pandemic and the Russia-Ukraine war.

His comments follow the World Bank’s 2025 Policy Notes titled Transforming Ghana in a Generation, which argues that the 2022 macroeconomic crisis was not triggered by global shocks but rather by domestic fragilities.

In a Facebook post on Sunday, September 28, Eduku stressed that “excessive borrowing and fiscal indiscipline weakened Ghana’s economy before COVID.”

He said Ghana’s reliance on debt to finance even salaries and statutory obligations revealed a worrying trend.

“This was not about investing in productive sectors for sustainable growth but simply about plugging short-term gaps,” he noted.

Mr. Eduku cited macroeconomic data to support his point. Public debt, he said, rose from 56% of GDP in 2016 to 62% by 2019, while fiscal deficits consistently breached the recommended 5% threshold.

“The persistent deficits, often financed through short-term borrowing, set the stage for instability,” he argued.

Sectoral performance also reflected these vulnerabilities. Agriculture growth slowed from 6.2% in 2017 to 4.7% in 2019.

Industry, traditionally Ghana’s engine of structural transformation, contracted from 15.6% in 2017 to -3.6% in 2020, even before the pandemic hit.

“The industry sector’s contraction in 2020, before COVID-19, was a clear warning that Ghana’s growth model was unsustainable,” Eduku stressed.

Services, which often cushion economies in times of crisis, stagnated at just 2.3%.

To Mr. Eduku, this signaled that all major sectors were losing momentum simultaneously. “When agriculture slows, industry contracts, and services stagnate, the economy is simply running out of steam,” he remarked.

He added that while the pandemic and Russia-Ukraine war worsened conditions, they only exposed what was already fragile.

“Temporary booms in extractives and construction masked deeper weaknesses. Once external shocks arrived, the cracks became undeniable,” Eduku explained.

He warned that Ghana’s economic challenges are largely homegrown and require structural reforms.

“Without tackling excessive borrowing, fiscal mismanagement, and sectoral stagnation, the economy will remain vulnerable to shocks both at home and abroad,” he said.