PwC Warns Ghana Economy Faces Second-Half Test as Commodity Boom Fades

First-Half Growth Numbers Reveal Fragile Foundation

Ghana's economic performance in the first half of 2026 presented a picture of robust recovery, with headline indicators suggesting the country had successfully navigated post-pandemic challenges.

The West African nation reported GDP growth of 4.2% in the first quarter, accelerating to 4.5% in the second quarter, according to official data from the Ghana Statistical Service.

Inflation, which had plagued the economy in previous years, declined significantly from 23.4% in December 2025 to 15.2% by June 2026, providing relief to consumers and businesses alike.

The cedi, Ghana's currency, demonstrated relative stability against the US dollar, depreciating by just 3.8% in the first half of 2026 compared to 14.2% during the same period in 2025.

These positive indicators prompted several international financial institutions to upgrade their outlook for Ghana, with the International Monetary Fund projecting full-year growth of 4.8% in its April 2026 World Economic Outlook.

However, PwC's analysis reveals a more nuanced picture when examining the composition of this growth.

The mining sector expanded by 12.4% in the first half of 2026, contributing 1.8 percentage points to overall GDP growth, while agriculture grew by 7.2%, adding another 1.2 percentage points.

In stark contrast, the manufacturing sector contracted by 1.2%, while construction grew by a modest 2.3%, well below the levels needed to address the country's infrastructure deficit and create sufficient jobs for its growing workforce.

'The growth is highly concentrated in commodity extraction, which has limited linkages to the rest of the economy,' said Efua Ofori, Director of Research at the Institute of Economic Affairs in Accra.

'This creates a false sense of security because commodity prices are inherently volatile and beyond Ghana's control.'

PwC's assessment points to several concerning trends beneath the surface of the positive headline numbers.

• Government revenue increased by 19% in the first half of 2026, but 68% of this increase came from mining and oil royalties
• Private sector credit growth slowed to 8.4% year-on-year in June 2026, down from 14.2% in December 2025
• The trade deficit widened by 23% in the second quarter as non-commodity imports grew faster than exports
• Foreign direct investment declined by 12% compared to the first half of 2025, with investors showing preference for short-term portfolio flows

These indicators suggest that the economic recovery remains fragile and heavily dependent on external factors that could shift rapidly.

The government's fiscal position, while improved, continues to face significant pressures, with debt servicing costs consuming 42% of revenue in the first half of 2026, according to Ministry of Finance data.

'The debt sustainability metrics have improved marginally, but they remain vulnerable to shocks,' said Kojo Asante, Senior Research Fellow at the Centre for Democratic Development in Accra.

'A moderate decline in commodity prices or a modest increase in borrowing costs could quickly reverse the gains made in the first half.'

PwC analysts identified several structural weaknesses that continue to undermine Ghana's economic resilience despite the positive headline figures.

The country's tax-to-GDP ratio remains at just 13.8%, well below the regional average of 16.4% and the government's target of 20%, limiting fiscal space for productive investments.

The business environment continues to face challenges, with Ghana ranking 112th globally in the World Bank's ease of doing business index, particularly weak in areas such as getting electricity (124th), registering property (128th), and enforcing contracts (132nd).

'These structural bottlenecks prevent the economy from diversifying beyond commodities,' said Tankeh.

'Until they are addressed, Ghana will remain vulnerable to external shocks and commodity price volatility.'

The first-half performance also masked growing regional disparities within Ghana, with the Greater Accra and Ashanti regions accounting for 68% of formal sector employment and 74% of GDP, while the northern regions continue to lag significantly in terms of infrastructure, education, and economic opportunities.

'The growth is not inclusive and not sustainable,' said Ofori.

'Without addressing these regional inequalities, we risk social instability that could undermine the entire economic recovery.'

Businesses Face Headwinds as External Factors Shift

The warning from PwC comes at a critical juncture as global economic conditions begin to shift in ways that could significantly impact Ghana's commodity-dependent economy.

Several external factors that favoured Ghana in the first half of 2026 are showing signs of reversal, creating potential headwinds for businesses operating in the country.

Gold prices, which reached a record high of $2,145 per ounce in April 2026, have since retreated to $1,985 by early August, reflecting changing investor sentiment as central banks signal a more hawkish stance on interest rates.

Cocoa prices have also softened from their peak of $3,400 per tonne in May to approximately $2,900 currently, as weather conditions in West Africa improve production prospects.

Oil markets remain volatile, with Brent crude fluctuating between $78 and $86 per barrel in recent weeks, creating uncertainty for Ghana's emerging oil sector.

'The commodity supercycle that boosted Ghana's first-half performance is losing momentum,' said Michael Mensah, Commodities Analyst at West African Financial Services.

'Businesses that expanded operations based on these elevated prices may find themselves overextended as market conditions normalise.'

Beyond commodity prices, several other external factors are creating challenges for Ghanaian businesses.

The US Federal Reserve has signalled that interest rates may remain elevated for longer than previously anticipated, which could strengthen the dollar and put pressure on the cedi.

European economic growth has slowed more than expected in the second quarter, with the eurozone expanding by just 0.2%, potentially reducing demand for Ghanaian exports.

China, Ghana's largest trading partner, continues to face structural economic challenges that could dampen its appetite for commodities.

'Ghana operates in a highly interconnected global environment, and these shifting external dynamics will inevitably impact the domestic economy,' said Efua Ofori, Director of Research at the Institute of Economic Affairs.

'Businesses need to stress-test their operations against various scenarios to ensure they can weather potential shocks.'

PwC has identified several specific risks that businesses should monitor closely in the second half of 2026.

• Currency volatility: The cedi could depreciate by up to 15% against the dollar if commodity prices decline significantly, increasing costs for import-dependent businesses
• Inflationary pressure: Core inflation (excluding food and energy) remains elevated at 18.4%, suggesting underlying price pressures that could resurface if external conditions change
• Financing costs: Interest rates are expected to remain high, with the Bank of Ghana's policy rate at 28.5%, making borrowing expensive for businesses
• Supply chain disruptions: Global shipping costs have increased by 34% since June due to geopolitical tensions, potentially affecting import costs

'These risks are interconnected and could compound each other,' said Kingsley Webora Tankeh, Senior Economist at PwC Ghana.

'A currency depreciation, for example, would increase import costs, which could feed into inflation, potentially prompting the central bank to raise interest rates further.'

The changing external landscape is particularly challenging for small and medium-sized enterprises (SMEs), which typically have less access to hedging instruments and working capital than larger corporations.

According to a survey by the Ghana National Chamber of Commerce and Industry, 62% of SMEs reported difficulty accessing credit in the second quarter of 2026, up from 48% in the first quarter.

'SMEs are the backbone of Ghana's economy, employing about 70% of the workforce, but they are also the most vulnerable to external shocks,' said Nana Adjei, CEO of the Ghana SME Finance Initiative.

'Without targeted support, many could struggle to survive the headwinds expected in the second half.'

The agricultural sector, which employs nearly 40% of Ghana's population, faces particular challenges as input costs remain high despite the favourable cocoa prices.

Fertiliser prices, though down from their 2024 peak, remain 45% above pre-pandemic levels, while fuel costs have increased by 23% since January 2026.

'Smallholder farmers are caught between rising production costs and uncertain commodity prices,' said Kwame Asante, Executive Director of the Ghana Agricultural Producers Association.

'Many are reluctant to invest in expansion, which could limit production next year.'

The manufacturing sector, already struggling with competition from imports and inadequate infrastructure, faces additional pressure from rising energy costs.

Electricity tariffs increased by 15% in July 2026, the third adjustment this year, making Ghanaian manufactured goods less competitive both domestically and in export markets.

'Our energy costs are among the highest in the region, and these frequent tariff adjustments make long-term planning nearly impossible,' said Samuel Osei, Chairman of the Association of Ghana Industries.

'Some of our members are already considering relocating production to neighbouring countries with more stable energy costs.'

For businesses with significant exposure to the commodities sector, PwC recommends developing hedging strategies to manage price volatility, diversifying supply chains to reduce dependency on single markets, and building stronger cash reserves to weather potential downturns.

'The businesses that will thrive in this environment are those that plan for various scenarios rather than assuming current favourable conditions will continue indefinitely,' said Tankeh.

Ghana's Economic Resilience Questioned Amid Global Uncertainty

The warning from PwC raises fundamental questions about Ghana's economic resilience and its ability to withstand external shocks without significant structural reforms.

Despite decades of economic planning and various development strategies, Ghana remains heavily dependent on a narrow range of commodity exports, making it vulnerable to global market fluctuations.

Gold, cocoa, and oil together account for approximately 83% of Ghana's export earnings, a concentration that has changed little over the past decade despite government efforts to diversify the economy.

This dependence creates a structural vulnerability that commodity price booms cannot permanently address, according to economic experts.

'Ghana's economy is like a table with three legs – gold, cocoa, and oil,' said Kojo Asante, Senior Research Fellow at the Centre for Democratic Development.

'When all three are performing well, the table appears stable, but it doesn't take much to make it wobble.'

The country's experience during previous commodity price cycles illustrates this vulnerability.

During the commodity boom of 2010-2014, Ghana experienced rapid growth, averaging over 8% annually, leading some analysts to predict that the country was on the verge of an economic takeoff.

However, when commodity prices collapsed in 2015, Ghana's growth plummeted to 3.4%, the currency depreciated sharply, and the country faced a severe fiscal crisis that ultimately required an IMF bailout.

'We've seen this movie before,' said Efua Ofori, Director of Research at the Institute of Economic Affairs.

'The question is whether we've learned the lessons from previous cycles or whether we're destined to repeat the same mistakes.'

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