Economic trends and outlook



2022 was always assumed to be the year that a sustainable economic recovery began to take shape. The pandemic was assumed to be moving (or had already moved in some countries) into the endemic phase, whereby countries would treat the pandemic as they would the seasonal flu. Of course, the war in Ukraine, continued supply chain disruptions stemming from, among other things, China’s zero-COVID policy, and rising inflation in developed countries have disrupted any chance of a sustained bounce back from two years ago. African economies have had to manage additional crises, such as extreme weather events, food insecurity, and upcoming election pressures.


Ghana has not been spared from economic hardship. Data released in September showed that Ghana’s inflation has continued to increase, rising by 33.9% in August, the fifteenth consecutive monthly rise, and the highest in 21 years. Concerning for households, food inflation accelerated sharply to a whopping 34.4%. Unfortunately, much of these woes are as a result of higher transport costs, further buoyed by a weak cedi. To counter this, the Bank of Ghana (the central bank responsible for managing the value of the currency) has taken steps to combat this, raising rates by 3% to 22% in August, meaning rates have risen by 7.5% since the start of the year. While the Bank has aimed to prop up the value of the cedi by raising rates, little impact has been seen, as the cedi most recently fell to GH¢9.6:US$1 on October 7th (compared with GH¢6:US$1 at end-2021). More rate hikes are expected, at least well into next year. Compounding this are limited options for providing reprieve to consumers, an examples such as reducing fuel taxes would be counter-productive when looking at the debt situation.


Debt is expected to act as a drag on Ghana’s economic outlook, echoing what many African countries are faced with in 2022. Mozambique, Tunisia, Egypt, Congo and Zambia are all facing enormous debt burdens relative to their shares of GDP, and for many, Ghana included, approaching the International Monetary Fund (IMF) is the only viable solution. In July, the country reached out to request IMF assistance, aimed at doubly support public finance and building investor confidence, as currently, Ghanaian public debt sits at around 78% of GDP. For reference, the IMF sets the baseline level for emerging markets at around 60%- anything above that and the country is at risk of a debt crisis, or in extreme cases, a debt default. Unsustainable debt makes life difficult for a country’s citizens. Governments need to find funds to repay the debt, and the only choices involve either improving the revenue base, through the implementation of the Electronic Transaction Levy (E-levy) for example, or through spending cuts. This leaves little funds available for other growing commitments, and may place the Free Secondary High School policy at risk. These would both be unpopular at a time when many households are struggling to make ends meet. Already, Ghanaians have taken to the streets earlier this year to protest the introduction of the E-levy.


At a firm level, the country must grapple with these economic challenges mentioned above while incorporating trends in the future of work into workforce planning. Hybrid and remote work has become normalised globally, and more firms have adopted hybrid models of working to build on foundations created during COVID-19. According to research firm Gartner, 75% of people globally believe hybrid work in now the dominant flexible working model. Little evidence exists showing the take-up of hybrid working in Ghana, and HR firms should look to develop as part of their talent strategy.  Anecdotal evidence also suggests that EU demand for Ghanaian remote workers was popular during the pandemic. This presents a challenge in fighting for skilled workers with European companies, who can pay premium wages compared to local firms, or offer greater job security.


Based on these challenges, HR managers will need to take cognisance of the struggling household position, while also building forward-looking offerings in the form of remuneration, both monetary and non-monetary. The constrained margins many firms are facing will place pressure on offering inflation-linked increases, especially as inflation will remain elevated into 2023.


  • Strong economic challenges on the horizon for the consumer, even if positive economic growth is occurring
  • Inflation is eating away at incomes of the poor as rising prices and government policies makes goods unaffordable
  • Firms will have to use more cash flow to mitigate economic challenges, with less revenue available for remuneration
  • HR managers will need to think creatively about remuneration and non-monetary benefits to drive staff loyalty and retention

In these times of economic hardship, adopting non-monetary measures such as hybrid working can be beneficial. This will require innovative thinking and leadership that overcomes the monetary challenges and builds employee loyalty. 





Sam Rolland, Director: Sub-Saharan Africa

Economist Intelligence Corporate Network


Published with the permission of Economist Intelligence Corporate Network

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