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Reboot: The Essential Guide

Ghana's Economic Reset: A Mid-Term Assessment

Six months into President John Dramani Mahama's "Ghana Reset Agenda," the nation is shifting from political promises to economic realities. Faced with past fiscal mismanagement, high inflation, and a growing debt crisis, Ghanaians are looking for sustainable growth, built on fiscal discipline, accountability, and data-driven policies. This reset aims for a systemic change driven by economic principles, behavioral insights, and financial innovation.

The Economic Landscape Before the Reset

Prior to January 2025, Ghana's economy struggled with significant challenges:

• High Inflation: Reaching 54.1% by December 2023.
• Massive Public Debt: Exceeding GH₵610 billion, over 88% of GDP.
• Elevated Interest Rates: The Bank of Ghana's policy rate stood at 30% in 2024.
• Currency Depreciation: The Cedi weakened from GH₵6.2 to GH₵13.5 per USD between 2021 and 2024.
• Youth Unemployment: Estimated at 13.9% nationwide in 2023.
• Reliance on IMF Support: The country engaged in debt restructuring under the G20 Common Framework.

These factors eroded confidence in state institutions and currency management, leading to inadequate public services, increased corruption, and a weakened social contract. The need for a comprehensive reset was evident.

The Four Pillars of the "Ghana Reset Agenda"

President Mahama's agenda, introduced in January 2025, is structured around four key pillars:

1. Fiscal Clean-Up and Rebalancing: This involves reducing recurrent spending, eliminating "ghost names" from the public payroll (saving GH₵2.4 billion in the first quarter alone), and streamlining ministries to reduce administrative overlap.

2. Revenue Expansion Through Digitization: The plan includes upgrading the Ghana Revenue Authority's (GRA) digital platforms, broadening the tax base, and targeting the informal sector with mobile-based tax compliance systems.

3. Agricultural Productivity Boost: The "Agri Reset Program" invests GH₵1.2 billion in irrigation, agro-processing, and mechanization. Early results show a 14% increase in maize output in the Bono and Northern regions by June 2025.

4. State-Owned Enterprise (SOE) Reform: The boards of 15 loss-making SOEs were dissolved. The Tema Oil Refinery (TOR), Electricity Company of Ghana (ECG), and Ghana Water Company are undergoing performance-based restructuring with 12-month transformation plans.

Early Progress: Signs of Improvement

While still in its early stages, the "Ghana Reset Agenda" has shown some positive outcomes:

• Inflation Reduction: Inflation has decreased to 31.2% as of May 2025, attributed to coordinated monetary and fiscal policies.
• Cedi Stabilization: The Cedi has slightly appreciated to GH₵12.2 per USD, supported by increased foreign exchange reserves and disciplined forward FX sales by the Bank of Ghana.
• Economic Growth: Ghana's real GDP grew by 4.9% in the first quarter of 2025, driven by the services, agriculture, and energy sectors.
• Tax Revenue Increase: The tax revenue-to-GDP ratio rose from 13.5% in 2024 to 15.1% by May 2025, moving towards the medium-term target of 18%.
• Public Wage Bill Reduction: The public wage bill was reduced by 0.6% of GDP through biometric payroll audits and rationalization of salary scales.

The Science Behind the Reset: Beyond Intentions

This reset distinguishes itself by using financial science and institutional discipline:

• Behavioral Economics: Policies now consider how Ghanaians respond to incentives. The government offers utility bill discounts for tax-compliant SMEs and mobile micro-credit for registered informal sector participants, linking formalization to tangible benefits.
• Macroeconomic Coordination: A Fiscal Council and Monetary Policy Dialogue Forum meet quarterly to align fiscal and monetary targets, improving coordination between the Bank of Ghana and the Ministry of Finance.
• Public Financial Management (PFM) Systems: The rollout of the Integrated Financial Management Information System (IFMIS) across all 16 regions ensures real-time tracking of budget execution, reducing leakages.
• Data-Driven Governance: The reset includes mandatory publication of monthly fiscal reports, procurement dashboards, and SOE performance scorecards, enhancing transparency and decision-making.

Essential Disciplines for Long-Term Success

For Ghana's reset to be sustainable, certain foundational behaviors must continue:

• Political Will: Resisting excessive spending during election years and embedding fiscal rules in law, such as a Fiscal Responsibility Amendment Bill to limit deficits to 3% of GDP.
• Institutional Independence: Protecting the Bank of Ghana, the Auditor-General, and the Economic and Organised Crime Office (EOCO) from political interference.
• Citizen Engagement: Promoting tax morale and civic participation through public education and digital platforms for monitoring local projects.
• Meritocracy in Public Appointments: Ending patronage and basing hiring and promotions on competence and service delivery KPIs.

Potential Risks and Challenges

Despite progress, several threats remain:

• Debt Burden: Even after restructuring, Ghana's interest payments consume nearly 38% of domestic revenue.
• Political Populism: Resistance to utility tariff adjustments and subsidy reforms could disrupt the fiscal balance.
• Public Sector Resistance: Bureaucratic inertia, corruption, and capacity gaps could hinder reforms.

Maintaining Momentum Through Discipline

At the six-month mark, the Ghana Reset shows promising signs. Inflation is stabilizing, investor confidence is gradually improving, and structural reforms are gaining momentum. However, history indicates that reform can easily falter due to political expediency, bureaucratic resistance, or economic shocks.

The key to transforming policy into true economic transformation is discipline – not just fiscally, but as a national principle. Sustained commitment, institutional credibility, and evidence-based governance must guide every decision. This reset is a marathon, not a sprint.

For Ghanaian citizens, the message is clear: this is a long-term restructuring, not a short-term fix. For the private sector, the emerging stability signals renewed investment opportunities, supported by policy coherence and macroeconomic clarity. For the civil service, the reset demands reform or stepping aside. The government must remember that resets are dynamic systems requiring constant adjustment, coordination, and conviction.

If Ghana maintains this course, a recovery plan could evolve into a generational economic renewal, grounded in science, sustained by discipline, and driven by a collective commitment to change.

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