The commendable economic gains of Ghana over the past few months currently hang by a thread due to a highly volatile global economy and domestic fiscal constraints.  According to the Ghana Statistical Service (GSS), Ghana recorded an annual GDP growth rate of 6 per cent in 2025, as against an annual GDP growth rate of 5.8 per cent in 2024.

Key macroeconomic indicators such as inflation, exchange rates and interest rates reflect economic buoyancy in spite of government's commitment to servicing extremely high external debts.

As part of the post-2024 restructuring recovery, Ghana successfully serviced over US$1.17 billion in Eurobond debt up to mid-2025 as reported by Ghana's Ministry of Finance and has further projected a total external debt service of US$1, 409.06 million for 2026.

With a current inflation rate of 3.3 percent as at February 2026 compared to 23.1 percent in February 2025, a Monetary Policy Rate (MPR) of 15.5 percent in February 2026 and a Cedi/Dollar exchange rate of approximately GHS 10.68 (buying) to GHS 10.69 (selling) at the end of February 2026, it is safe to say the Ghanaian economy is enjoying somewhat good stability.

Beyond the statistics, this article aims at highlighting the effects of Ghana's economic growth on her economic development i.e. the actual improvement or otherwise of the standard of living of Ghana's population. We will further explore the distribution of income and ultimately the inequality gap in the Ghanaian economy.

During the economic period 2022, Ghana recorded a dramatic surge in inflation, ending the year with a rate of 54.1 per cent. In the ensuing years, 2023 to 2024, the rate slowly declined while fluctuating between 40 per cent and 29 per cent. This background is necessary to establish the reason for the high interest rates recorded within the period. For example, the MPR rate was about 30 per cent while commercial bank lending rates were about 36 per cent in 2023.

The effects of these rates include the rising cost of credit for businesses, which led to a rippling effect of increased costs of production and increased rates of inflation.

During the period under review, i.e. 2022 to 2024, small-scale businesses faced substantial hurdles in accessing finance largely due to strict collateral requirements, high interest rates and banks' preference for short-term loans. This heavily affected the contributions of SMEs to Ghana's GDP (about 70 per cent according to The Development Bank of Ghana). A major ramification was job cuts and, in some cases, a complete closure of businesses by some SMEs.

Considering the fact that SMEs account for about 80 to 85 per cent of employment in Ghana, this was a major shock to the income of many households.

Additionally, a significant number of households were pushed further down the wealth ladder due to the high costs of living. While relatively safe investments such as Treasury bills offered good interest rates (which is debatable due to the then existing inflation rates), there was little or no available funds for investment by low and many middle-income households.

Thus, high-income households grew wealthier and further widened the inequality gap. It is worthy of note that the World Bank estimates that approximately 44 per cent of micro, small, and medium enterprises (MSMEs) in Ghana are female-owned. However, Oxfam reports that gender inequality remains a pervasive issue. Where women are more likely to be poorer and have fewer assets than men.

The lack of assets, which is largely a socio- economic issue, greatly impacts the access of these female-owned businesses to credit opportunities for business purposes.

In summary, the challenges of the economy, as reflected by major macroeconomic indicators, directly impacted the standard of living of most Ghanaian households. The inequality gap was widened on income and gender levels, which inevitably impacted health inequality. The government, however, mitigated the effect of inequality on education through the Free SHS policy, which granted wide access to education.

As earlier stated, the economy of Ghana recorded relatively better indicators in the year 2025 as compared to the preceding three years. However, do these admirable statistics mirror the quality of life of Ghanaians and is there a direct connection between the statistics and the reality of life, with particular concern about the inequality gap?

With regard to household income, although the unemployment rate has been on the decline since 2022, a fast-growing labour force has accounted for insignificant successes in the record of employment. In reality, the majority of Ghanaians between the ages of 15 and 35 years are still unemployed. The disconnect between educational institutions and the labour market still exists.

Secondly, the economy still lacks capacity in the manufacturing sector with regard to employment. Furthermore, the agricultural sector remains unattractive to many youths despite its potential in absorbing many unemployed Ghanaians.

Diving down to household income, although there have been improvements in interest rates to attract borrowing by SMEs, the structural corporate and accounting challenges still inhibit their access to credit. Financial institutions still prefer to give short-term loans, which are not attractive to businesses.

Furthermore, lack of collateral is still a major challenge, especially for women-owned businesses. These bottlenecks faced by many businesses directly affect the overall income of households. While inflation rates appear favourable and provide many middle-income households the liberties for wealth creation, there is a lack of information and options on investments within and outside the economic jurisdiction.

In the area of health, the National Health Insurance Scheme still covers less than 2 per cent of the poorest of the population. Unequal distribution of infrastructure and health care professionals restricts access to quality health care.

Thus, health equality seems far from reach. With the educational sector, an argument can be made for the quality of education attained despite the admirable progress made with regard to access to education through the Free SHS policy. In order to build an exceptional labour force, maximum effort must be made for the provision of quality teaching and learning materials, infrastructure and frequent interactions with industry.

Attention to the inequality gap is crucial because inequality within an economy affects access to quality health care, education and overall quality of labour and standard of living within an economy. It significantly increases the risk of political, social and economic instability. With about four years to the deadline of attaining the Sustainable Development Goals by all members of the United Nations, the government of Ghana will have to critically aim at implementing policies that translate the favourable macroeconomic indicators into impactful realities for its citizens.

A stable economic framework can only be achieved in a somewhat egalitarian society. Thus, bridging the inequality gap is crucial for the attainment of economic development.

It is my humble submission that, although the current macroeconomic indicators of the Ghanaian economy are notable accomplishments, the statistics of economic growth must be felt beyond figures and trust that the managers of the economy will take steps to drive the economy in this regard.

The writer is an Economic and Policy Research fellow at the Policy Initiative for Economic Development (PIED Africa). She holds BA Economics with Political Science from the University of Ghana and MSc Development Economics from the University of Manchester, UK.

Cindy can be reached via [email protected]/[email protected]/  0506809789

By Cindy Nortey (Ms.)