World Bank Urges Structural Reforms as Ghana's 6% Economic Growth Fails to Lower 56.4% Poverty Rate

The World Bank’s Tenth Ghana Economic Update has revealed a stark contrast between Ghana’s macroeconomic recovery and the living conditions of its citizens. While the nation’s economy grew by a robust 6.0% in 2025, outperforming initial IMF expectations, the report highlights that 56.4% of Ghanaians continue to live in poverty. Dr. Robert Taliercio O’Brien, the World Bank’s Division Director for Ghana, warned that the current recovery remains "structurally incomplete," as the gains from high-growth sectors fail to reach the broader population or provide sufficient opportunities for the country’s burgeoning youth workforce. Despite the drop in inflation from 23.2% to approximately 3.2% earlier this year, structural imbalances persist, leaving a significant portion of the population outside the formal economic system.

On the fiscal front, Ghana has achieved several significant milestones under its ongoing reform program. Public debt saw a dramatic decline from 70.3% of GDP in 2024 to 49% by the end of 2025. Additionally, the government recorded a primary fiscal surplus of 2.5% of GDP, comfortably surpassing the 1.5% target. However, the World Bank cautioned that this surplus was driven largely by substantial spending cuts, including a 38% reduction in capital expenditure. Experts argue that while these cuts provided short-term fiscal relief, a long-term reliance on reducing infrastructure investment could eventually stifle national development and undermine the very growth the government seeks to sustain.

Domestic vulnerabilities in the energy and agricultural sectors continue to pose significant risks to the economic outlook. The World Bank reported that delays in energy sector recovery programs are costing the state approximately $1 billion annually. Furthermore, financial inefficiencies within the Ghana Cocoa Board (COCOBOD) have been flagged as a major fiscal risk. The bank is calling for far-reaching reforms to the COCOBOD Act to introduce market-based principles and protect public finances. External factors, including prolonged tensions in the Middle East and volatility in gold and cocoa prices, further threaten to disrupt global trade and increase production costs, potentially reversing the recent inflationary gains.

To bridge the gap between economic growth and poverty reduction, the World Bank is advocating for urgent reforms in the transport and manufacturing sectors. The report recommends six key transport reforms to enhance productivity and connectivity, supported by a $500 million World Bank investment in feeder roads to bolster agricultural supply chains. Finance Minister Dr. Cassiel Ato Baah Forson has affirmed the government’s commitment to these structural reforms and ongoing collaboration with international partners. The path forward will require maintaining fiscal discipline while shifting focus toward job-rich growth and export diversification to build a more resilient and inclusive economy for all Ghanaians.