The World Bank has revealed that the economic situation in Ghana has improved while economic indicators and prospects for the country remain on track for 2024 and beyond.

The World Bank made the revelation on Monday, in a press statement, after its 8th Economic Update for Ghana titled, “Strengthening Domestic Revenue Systems for Fiscal Sustainability.”

According to the global financial institution, the economic situation in the country improved in line with targets due to the Ghanaian government’s efforts to restore fiscal and debt sustainability, reduce inflation, and strengthen financial stability.

The report, which highlighted the steady progress Ghana made over the past year in addressing severe macroeconomic imbalances in 2022, also revealed that the West African country attained the feat despite the recent rise in the pace of exchange rate depreciation and slower-than-expected inflation reduction.

The World Bank stated, “Due to the lingering effects of the macroeconomic challenges, growth in 2023 was low at 2.9%, albeit higher than initial projections, while inflation declined to 23.2% in December 2023 from a peak of 54.1% in December 2022,” attributing the progress to the Bank of Ghana’s firmer monetary policy and more stable exchange rates.

The World Bank’s acting country director for Ghana, Liberia, and Sierra Leone, Michelle Keane, said the country’s macroeconomic crisis in 2022 “has set back poverty reduction efforts, with poverty levels estimated at 30.3% in 2023.”

Stressing the importance of maintaining the momentum of the reforms while mitigating their impact on the poor to help sustain Ghana’s economic rebound, Ms Keane stated that it was imperative to “lay the foundations for more sustainable and resilient economic growth by implementing comprehensive structural reforms to foster economic diversification and promote long-term inclusive growth.”

However, the World Bank recommended the re-establishment of “the fiscal rule, strengthening public financial management, and accelerating revenue mobilisation to restore macroeconomic stability and support long-term sustainable growth,” adding that “structural reforms will be key to revitalise growth and foster economic diversification and transformation.”

It also advised that facilitating access to long-term financing and improving the business climate could create a conducive environment for private sector growth while noting that building human capital and improving service delivery for underserved regions and populations can enhance productivity and attract both Foreign Direct Investment (FDI) and local investment in high-value, labour-intensive manufacturing and services.

Economist and author of the Economic Update, Kwabena Gyan Kwakye, explained that the prescribed measures will “collectively aim to enhance fiscal transparency, accountability, and resilience, ensuring sustainable economic growth; and should be complemented by initiatives to expand targeted social protection programs to promote social inclusion.”