According to the report, “the worst of the region’s sovereign debt pressures appear to be over, but external debt servicing burdens remain high”.

This, the EIU warned presents a critical challenge for African countries like Ghana, calling for the need to improve domestic revenue collection.

The report said Ghana is one of the many African nations grappling with macroeconomic stability challenges.

“With nearly half of the continent’s countries still under IMF programs in 2025, fiscal discipline and sustainable financing have become even more critical”.

The EIU observed that high external debt servicing costs continue to strain national budgets, making it imperative for Ghana to explore internal financing mechanisms.

The EIU report noted that “Africa will be home to most of the world’s fastest-growing economies in 2025, with increased investment expected in sectors such as renewable energy, ICT, and logistics. This presents a significant opportunity for Ghana. The nation can strategically position itself to benefit from these trends while ensuring infrastructure investments align with national development priorities”.

Some economic analysts argue that Ghana’s infrastructure financing model should be tailored to long-term economic sustainability, rather than short-term debt accumulation. This approach is essential to avoid the pitfalls of unsustainable debt burdens.

However, disruptive regional rivalries and lingering social issues remain a concern for economic stability, as highlighted in the EIU report.

“Economic performance varies considerably across the continent, and intense global geopolitics will create a difficult backdrop and present tough decisions for African governments. Ghana must navigate these complexities while implementing policies that ensure sustainable infrastructure development”.

The EIU again warned that with external debt and servicing burdens remaining high across Africa, Ghana must avoid the pitfalls of over-reliance on external borrowing.

“The worst of the region’s sovereign debt pressures appear to be over, but economic performance varies considerably. Therefore, Ghana must implement policies that prioritize sustainable financing mechanisms to ensure resilience against global economic shocks”.

While challenges such as inflation, geopolitical tensions, and supply chain disruptions persist, Ghana has the potential to chart a new course in infrastructure financing. Experts believe that a well-coordinated strategy involving pension funds, public-private partnerships (PPPs), and policy reforms will drive the country’s infrastructure growth in a sustainable manner.

According to the EIU, “attracting more inward foreign direct investment has proved difficult for many African states in recent years, but foreign investment targeting Africa is expected to edge higher in 2025”.

It added that Ghana must strategically position itself to capitalize on this trend by creating an attractive investment climate for both domestic and international investors.

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It also projects a marginal depreciation of the local currency in 2025 to GH¢17.23 to one American greenback.

This was capture in Deloitte’s Report titled “Sneak Preview of 2025”.

According to EIU, a decrease in cocoa exports and a higher import bill will spur some weakness in the cedi towards the end of 2024.

However, in 2025, the improved investor confidence arising from the relatively peaceful election, the conclusion of the government’s debt restructuring negotiations, periodic International Monetary Fund (IMF) disbursements and higher gold export receipts will boost the international reserves level of the country and support the cedi’s value.

Presently, the cedi is trading at GH¢16.10 to one dollar on the retail market.

Implications and Risks

Deloitte said a more stable exchange rate is positive for restoring investor confidence in an economy.

The risk to a stable cedi, it explained, arises predominantly from a rise in imports from the services sub sector such as hydrocarbons and mining projects.

“Also, a more than anticipated decline in cocoa exports could lead to a narrower trade surplus and a decline in the current account balance of the country. Ghana’s current account balance is forecast to decline to US$700 million in 2025 from an estimate of US$1.6 billion in 2024”, it added.

Source: Joy Business

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This means growth will be unchanged rather than slowing from 2023.

“Growth is proving surprisingly resilient in the face of high interest rates and geopolitical risks”, the London-based firm said in its global outlook.

The change in global growth it said reflects another upward revision for US growth in 2024 to 2.2% from 2% previously, upward revisions for several European economies that have pushed euro area growth to 1% from 0.8% and an upward revision for Brazil to 2.1% from 1.8%.

“We have reduced our expectations for future monetary policy loosening, removing one 25-basis point cut from the loosening cycles of both the Federal Reserve (the US central bank) and the European Central Bank in 2024-25. In contrast, we now expect the Bank of England (the UK central bank) to cut quicker than previously forecast, lowering its rate to 3.5% by end-2025 (compared with 4.25% previously)”.

Geopolitics will lead to reconfigurations in global economy

The EIU forecasts more fragmentation and regionalisation in the world economy in 2024-28 as alliances tighten and competing blocs form.

The return of industrial policy, including sanctions and the provision of new incentives, will push firms to adopt more inefficient supply chains, stoke trade tensions in strategic sectors and make it difficult to compete across the global marketplace.

These developments, it said, will drag on growth potential.

“We expect that global real GDP will expand by 2.8% a year on average over the next five years—below the 3% of the 2010s, which was hardly a stellar decade for the global economy.

Immediate growth outlook is fairly rosy

In the near term, however, the EIU, said global economy is showing resilience in the face of international conflict and higher interest rates.

This mainly reflects the remarkable strength of the US economy, which is driven by strong household finances, a rising trend in manufacturing investment and a booming technology sector.

Elsewhere, it said the picture is less dynamic but short of a downturn.

Momentum in Europe will build gradually in 2024. Modest government stimulus in China is helping the economy to emerge from a property-related slump.

Emerging markets will benefit from a rebound in global trade and firm commodities demand, even though they will face challenges from a strong US dollar and high debt-servicing costs.

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This will be a significant fall from the average of about 38% in 2023.

According to the UK-based firm, Ghana’s average inflation in 2024 will place it 8th in Africa, but lower than Nigeria (22%).

It said inflationary pressures are expected to ease from the more elevated levels recorded in 2023 for all but a small handful of African countries—including Seychelles and Sudan.

“Inflationary pressures are expected to ease from the more elevated levels recorded in 2023 for all but a small handful of African countries—namely Angola, Seychelles, Sudan and Tanzania, where country-specific factors will push up consumer price inflation”.

It added an easing of consumer price pressures will be a welcome relief for policymakers and households.

However, inflation will run strong into 2024 and remain a central story for several large economies, including Angola, the DRC, Egypt, Ethiopia, Ghana, Nigeria, Sudan and Zimbabwe.

“These countries will continue to suffer the economic instability generated by another year of double-digit consumer price inflation, largely driven by elevated oil prices”.

October 2023 inflation drops to 35.2%

The year-on-year inflation for the month of October 2023 fell to 35.2% from the 38.1% recorded in September 2023.

Data from the Ghana Statistical Service (GSS) showed that the decrease in the general inflation rate was attributed to the marginal drop in food inflation.

Food inflation in the period was 44.8%, while non-food inflation was 27.7%

In addition, inflation for locally produced items was 34.4% while imported items stood at 34.4% from 37.4% in last month.

According to the Unit’s latest report released, the main factors influencing this prediction include poor governance, economic hardship and debt restructuring.

“Our baseline forecast is that economic hardships, the fallout from debt restructuring and poor governance will create an anti-incumbency wave and push the electorate to seek change. The NDC, therefore, stands a strong chance of winning the 2024 presidential poll and securing a legislative majority,” portions of the report on April 28 read.

The Unit further noted that, whoever holds power, the focus of Ghana’s policy will remain to ensure macroeconomic stability.

Additionally, similar economic challenges are expected to be faced by the new government.

Trade Minister Alan Kyerematen, recently resigned to contest for the presidential candidacy of the New Patriotic Party (NPP).

Competition between the NDC and NPP for the presidential candidature is expected to be intense with high-profile figures such as former President John Mahama and former Finance Minister, Kwabena Duffuor contest in the flagbearership race.

The EIU’s baseline forecast is that economic difficulties and poor leadership may create an anti-incumbency wave, which will likely favour the opposition NDC.

According to Nana Akomea, this is due to the current economic difficulties experienced by the populace.

As a result, he says the party isn’t surprised by the EIU report predicting a win for the National Democratic Congress (NDC) over the NPP in the 2024 general elections.

Nana Akomea noted however, that the party has enough time to remedy the situation.

“The Economic Intelligence Unit’s report is interesting because everybody in this country, including the NPP, knows that at this time because of the current economic difficulties, if an election was held today, the NPP will not be the most popular party. We know it” he said in an interview on Citi TV.

“Fortunately for us, elections will not be held today. It will be held in two and half years’ time, and we believe that gives us more than enough time to remedy the situation and get back into the good books of the majority of the voters. So we don’t have any worry about any report that is telling us that we are not popular. We know it ourselves, ” Nana Akomea noted.

He said the party will thus put plans in place to address the challenges enumerated in order to get into the good books of the majority of the voting public.

London-based economic and political analyst, the Economist Intelligence Unit (EIU) in a five-year forecast for Ghana tipped the NDC to win the next general elections.

The EIU, however, expects the NDC to bring on board a new presidential candidate other than former President John Dramani Mahama.

Mr Gyamfi says the baseline forecast by the EIU aligns with the party’s own expectations. As a result, he says it is not surprising.

The EIU in its five-year forecast for Ghana, issued on April 13, stated that the opposition party can revitalise this prospect of victory with a fresh presidential candidate.

“The next parliamentary and presidential elections are due in 2024. Under constitutionally mandated term limits, the incumbent President, Mr Akufo-Addo, cannot run for a third term. The former President, John Mahama, is reportedly considering running again, but we expect the opposition NDC to try to revitalise its prospects with a fresh candidate,” the EIU said.

However, Mr Gyamfi, speaking on JoyNews’ AM Show Wednesday, rejected the caveat stated by the EIU to the party’s win.

According to him, Mr Mahama is the party’s best bet at winning the 2024 polls.

Mr Gyamfi insisted that there is nobody in the NDC to lead the party than Mr Mahama.

“Their findings, specifically their baseline forecast for the 2024 general election, aligns with our own expectation and the analysis of the situation in the country as far as the 2024 election is concerned.

“So it doesn’t come as a surprise to us at all that Ghanaians are disillusioned and disenchanted with the mismanagement of the economy by the Akufo-Addo-led administration in the last five years. Ghanaians are tired of their corruption, nepotism, waste, and the state of lawlessness, topping it with bad governance. So we know coming to the 2024 elections, we will be victorious in both presidential and parliamentary elections.

“The NDC will win the 2024 elections regardless of who leads the party and also John Mahama in my humble opinion, is our surest bet relative to winning the 2024 elections. He got 1.5 million votes in 2024 than he got in 2016, and therefore it cannot be true that with John Mahama, NDC cannot win the election.”

The EIU in its five-year forecast for Ghana, issued on April 13, predicted that the opposition National Democratic Congress (NDC) is likely to win the 2024 presidential polls.

It explained that economic crunch, poor infrastructure, deep-rooted corruption, and high employment levels superintended over by the governing New Patriotic Party (NPP) will play a key role to inform the voter’s choice, giving the NDC an upper hand in the polls.

However, it highlighted one condition based on which this prospect can be even more resounding.

According to the London-based analysts, their assessment shows that the opposition party can revitalise this prospect of victory with a fresh presidential candidate.

This will mean a new candidate other than John Dramani Mahama, who has led the party since 2012.

“The next parliamentary and presidential elections are due in 2024. Under constitutionally mandated term limits, the incumbent President, Mr. Akufo-Addo, cannot run for a third term. The former President, John Mahama, is reportedly considering running again, but we expect the opposition NDC to try to revitalise its prospects with a fresh candidate”, the EIU said.

But Mr. Kwakye Ofosu, reacting to the report on Joy FM’s Midday News with Emefa Apawu on Tuesday, April 19, said it is obvious that the NDC will win the 2024 polls.

However, he opposed the suggestion relating to change of candidate.

“I think that from a purely common sense standpoint, it doesn’t make sense to go and change a candidate who did so well.”

According to him, John Dramani Mahama has a proven track record that cannot be matched by the New Patriotic Party.

As a result, it won’t make sense for the party to waste resources in changing him because he resonates with the rank and file of the party.

Felix Kwakye Ofosu opined that the party only has to correct whatever went wrong in the 2020 elections to ensure a smooth victory.

“I think President Mahama resonates with the rank and file of the NDC. Everybody knows that he has a stellar track record that completely dwarfs anything or anyone the NPP has to offer.

“So on that premise alone, if you have a candidate who has a proven track record and has performed in the position that he is seeking and has performed creditably in the just-ended election, you don’t waste time and resources going to reinvent the wheel when you can only correct whatever wrongs that occurred in the previous election in order to present a more formidable force.”

The Deputy General Secretary of the National Democracy (NDC) has affirmed the party’s decision to maintain John Dramani Mahama as its presidential candidate for the 2024 general election.

Although Peter Otokunor was unable to confirm if NDC’s 2020 Presidential candidate had declared his intention to run in the 2024 elections, he described the introduction of a new presidential candidate for the party as “ridiculous”.

Speaking to Evans Mensah on Top Story, Mr Otukonor said reports from the grassroots indicate that Mr Mahama is the best choice for the NDC in the 2024 elections as it is believed that he will come and right the wrongs of the Akufo-Addo-led administration.

“The people of this country are resolved to give President Mahama a chance to come and fix what has been broken by the Akufo-Addo government. It appears that it is a groundswell from the party base that President Mahama would be our best choice for 2024. As to whether he will decide to contest or not, that one I may not be able to speak to that.

“As others have earlier on intimated that you have a marketed candidate, very well-known candidate, very loved by all, somebody who has to watch an election that has been botched, that has been altered, then you will go for a new candidate into a contest in 2024? I mean it will be most ridiculous. I think the worst political strategist will not make that mistake,” he said.

His comments follow a report released by the Economist Intelligence Unit on Friday, March 19, which suggested that although the NDC will win the general election, the party stands a better chance with a new candidate.

In the 25-paged document sighted by JoyNews, the EIU said this new candidate should be introduced to dispel rumours that former President Mahama, who is also the party’s 2020 flagbearer, is likely to contest again.

“After two terms of New Patriotic Party government, we expect the NDC to win the 2024 presidential election and to gain a small majority in Parliament…Mr Mahama is reportedly considering whether to run again, but we expect the NDC to seek to revitalise its prospects with a fresh candidate,” part of the report read.

But Mr Otokunor described the report as one that lacks credibility as it is based on “conjecture”.

“First of all, we think that the EIU report has not proved credible over the years so it is not any report that we would hold very high in esteem, especially as most of their research outcomes or their reports are not based on scientific research but rather ostensibly they are based on conjecture.

“So if it is conjecture by an individual who would sit and look at things that we already know, recount and make such conclusions, then the weight, the credibility, the gravitas, the contribution that it will make to political strategy would be very minimal and for that matter, I think that it is not anything to go by,” he explained.

He was of the view that the report by the EIU is trying to cover-up for their wrong forecast of the outcome of the 2020 elections.

“Everybody in this country knows that President Akufo-Addo didn’t win the 2020 Presidential elections. We know the NPP didn’t win a majority in Parliament. Contrary to the earlier prediction of EIU in 2020. So if they come up with this prediction, it is just riding on the back of the fact that the reality evaded or eluded them in 2020 and for that matter let’s make a prediction for NDC in 2024,” he stated.

In conclusion: “The people of this country are yearning for the real change that they desire. They are tired of the deceptive clueless incompetent government of the Akufo-Addo regime and I think that if the resolve they showed in the 2020 elections is anything to go by, it would amply be accentuated in 2024.”