The World Bank has warned that prolonged tensions in the Middle East could pose significant risks to Ghana’s economic recovery and macroeconomic stability.
According to the Bretton Woods institution, Ghana’s position as an oil producer and a major gold exporter could help cushion the economy against some external shocks.
However, prolonged disruptions to global trade caused by the Middle East conflict could still negatively affect the country.
The concerns were highlighted in the World Bank’s 10th Ghana Economic Update Report, titled “Reset for Growth: Sustaining Macroeconomic Recovery and Unlocking Transport for Transformation.”
Despite the risks, the World Bank projects that Ghana will end 2025 with economic growth of 4.8 per cent, noting that “medium-term outlook is broadly positive, though growth is expected to moderate”.
Over the medium term, growth is expected to gradually converge towards Ghana’s estimated potential of around 5 per cent.
Inflation is also projected to remain within the Bank of Ghana’s target band of 8 ± 2 per cent.
The current account is expected to remain in surplus in 2026, while the government’s primary surplus target of 1.5 per cent of Gross Domestic Product could be achieved if planned revenue reforms are successfully implemented.
However, the World Bank cautioned that “These projections are achievable but they are not guaranteed, and the downside risks to this outlook are material”.
The Bank said these risks remain key features of Ghana’s medium-term economic vulnerability, adding that threats to macroeconomic stability are tilted to the downside.
It further noted that “externally, gold price volatility, geoeconomic fragmentation, and the Middle East conflict which elevates energy, food, and agricultural input costs are the primary concerns potentially weighing on potential growth, eroding fiscal revenues, and driving inflationary and exchange rate depreciation pressures.”
The World Bank also expressed concern that policy slippages in the energy and cocoa sectors, as well as fiscal pressures from extending temporary relief measures such as fuel price interventions, could undermine Ghana’s recent macroeconomic gains and threaten efforts to maintain debt sustainability.
The report further warned that rising debt service payments between 2027 and 2028 could create rollover risks because of Ghana’s reliance on short-term debt instruments.
However, it maintained that “The reopening of the domestic bond market that started in April 2026 is expected to relax these financing pressures with longer-maturity instruments”.
To manage the risks, the World Bank proposed several policy measures, including stronger revenue mobilisation, improved expenditure quality and a more robust fiscal risk management framework.
On revenue, the Bank said Ghana’s domestic revenue mobilisation agenda remains central to fiscal sustainability. It noted that the primary surplus has largely been achieved through reduced spending rather than broad-based revenue growth.
The World Bank therefore recommended broadening the tax base, improving compliance and strengthening tax administration to ensure that all segments of the economy contribute fairly and equitably.
On expenditure, the Bank acknowledged policy measures introduced in 2025, including amendments to the Public Financial Management and Public Procurement Acts aimed at strengthening commitment controls and preventing future fiscal slippages.
However, it warned that continued cuts to capital investment, infrastructure maintenance and social transfers could weaken the foundations of Ghana’s medium-term recovery.
“Priority , must therefore must be placed on safeguarding high-return public investment, preserving priority social spending, and strengthening PFM to improve efficiency recognizing that fiscal discipline and growth-supportive expenditure are complementary, not competing, objectives”.
The World Bank also called for a stronger fiscal risk framework, including the systematic disclosure of contingent liabilities, the integration of risk scenarios into budget planning and improved accountability mechanisms for state-owned enterprises.
