The World Bank has rejected the Akufo-Addo administration’s long-held claim that Ghana’s economic collapse in 2022 was caused by global shocks. Instead, the Bank states that the crisis was fundamentally self-inflicted. In its 2025 Policy Notes on Ghana, the Bank explicitly declares, “The deterioration of global conditions due to the COVID-19 pandemic and the Russian Federation’s invasion of Ukraine did not cause the 2022 macroeconomic crisis; rather, it merely exposed an economy already affected by deep structural vulnerabilities and precarious macroeconomic conditions.”
For years, government officials attributed the severity of the downturn—characterised by soaring inflation, a plummeting currency, and eventual debt default—to external factors. However, the World Bank argues that domestic policy failures played a decisive role. It cites issues such as weak governance, fiscal indiscipline, and delayed reforms. Additionally, it notes that easy access to capital markets and the expectation of natural resource windfalls encouraged political short-termism, weakened accountability, and undermined the social contract.
The report emphasizes a recurring pattern of fiscal expansion followed by painful corrections, a cycle that has led Ghana into 17 separate IMF programs over the past 68 years.
“Sudden macroeconomic stops and crises have led the country to request a record number of IMF programs, remaining under active IMF support for 40 out of its 68 years of history,” the Bank noted.
The human cost has been severe. The Bank estimates that the 2022 crisis and its aftermath pushed more than 800,000 Ghanaians into poverty, with income per capita stagnating around US$2,200 for a decade and poverty now affecting over one-quarter of the population.
Warnings were also issued about renewed fiscal excesses in the 2024 election year. The report cites unbudgeted spending commitments of approximately US$4.8 billion, about 5.7 per cent of GDP, much of it accumulated outside official financial management systems.
“Spending indiscipline poses a critical challenge to Ghana’s macro-fiscal stability… the absence of stringent expenditure controls frequently results in budget overruns and excessive borrowing, undermining efforts to maintain fiscal discipline and compromising long-term sustainability,” the Bank cautioned.
Ghana is grappling with chronic inefficiencies across key sectors, which hinder economic progress beyond just fiscal mismanagement. The energy sector, in particular, costs approximately 2% of GDP annually, and despite repeated reform efforts, arrears continue to accumulate. Additionally, COCOBOD’s debt has surged to US$1.8 billion by 2024, with its interventions creating market distortions that negatively impact farmer incentives and overall industry performance.
The World Bank emphasises that Ghana is at a crucial turning point. Temporary solutions are inadequate. “There is an urgent need to signal a clear break from the past and a commitment to change. Success will ultimately be measured by the government’s ability to regain the trust of its citizens.”
The Bank’s policy recommendations are firm: restore fiscal discipline, broaden the tax base, reform state-owned enterprises, and enhance governance. Without decisive action, Ghana risks remaining trapped in a damaging cycle of crisis and bailout, a pattern that has characterised much of its economic history since independence.
Source: Anthony Manu| Data and Research Analyst @ JoyNews Research
