Gold output is projected to increase by 5.0% due to mine restorations, new projects coming online and the integration of artisanal mining into the official output figure, supporting exports.

Already, there are projections which indicate that Ghana will consolidate its position as the leading gold producer in Africa this year due to several factors including new discoveries.

On the other hand, cocoa production is forecasted to rise by 3.0%, supported by higher farm gate prices that should curb smuggling, adding additional tailwinds to export growth. 

“That said, we project imports to recover in 2024 as a result of a rise in domestic demand, which will offset the impact of solid exports on headline growth.

“All told, we anticipate that net exports will shave off 0.4 percentage points from headline real Gross Domestic Product (GDP) growth in 2024, following a positive contribution of 1.9 percentage points in 2023,” The report added.

Election fears

With Ghanaians going to the polls later in the year, Fitchsolutions says a more expansionary fiscal stance will inject additional demand into the economy. 

“While the authorities have confirmed their commitment to implementing fiscal reforms in line with Ghana’s IMF programme, we anticipate significant public expenditure overruns ahead of the December 2024 general election, particularly given that the ruling New Patriotic Party (NPP) trails behind in the polls.

“Indeed, since the start of the century, public expenditure, as a share of GDP, increased by an average of 3.0 percentage points during election years, reflecting the government's tendency to subsidise utilities and implement social welfare programmes to garner public support,” Fitch Solutions said.

Against this background, the rating agency said it anticipates that such measures will be implemented again in 2024, improving disposable incomes and stimulating household spending. “All told, we forecast private consumption growth to tick up to 3.8% in 2024 – from 3.2% in 2023 – contributing 2.9 percentage points to headline real GDP growth,” it said.

Private consumption

Fitch Solutions said it expects that the Ghanaian economy will enter a recovery phase in 2024, driven by stronger private consumption.

The rating agency traced its argument from the last two years, saying soaring consumer price inflation over 2022-23 – due to the sharp sell-off of the Ghanaian cedi – weakened the purchasing power of households and weighed on domestic consumption. 

“However, we expect that price growth will moderate from an average of 40.3% in 2023 to 17.8% in 2024, driven by statistical base effects and more favourable exchange rate dynamics. Indeed, we expect that the authorities will make progress regarding the restructuring of Ghana’s external debt under the G20 Common Framework in the coming quarters.” 

Having reached a deal with its bilateral creditors, Fitch Solutions believes that a deal with commercial creditors will also be concluded by mid-2024, a development which will improve investor sentiment towards Ghanaian assets, improve capital inflows and provide support to the cedi, “which we forecast to strengthen by an average of 0.2% against the USD over 2024”.