ISSER warns Ghana’s $10bn trade surplus is too dependent on gold
Ghana’s $10 billion merchandise trade surplus in 2025 was largely driven by gold exports, leaving the economy exposed to fluctuations in global commodity prices and highlighting the need to diversify its export base, Director of the Institute of Statistical, Social and Economic Research (ISSER), Professor Robert Darko Osei, has warned.
He said that although Ghana made considerable progress in improving its macroeconomic conditions in 2025, sustaining those gains would require expanding manufacturing, increasing domestic value addition and ensuring that monetary stability translates into affordable credit for businesses.
Prof. Osei made the remarks at the launch of the 2025 State of the Ghanaian Economy Report (SGER), where he cautioned against relying heavily on gold to maintain the country’s external sector performance.
He warned that Ghana’s current economic position was being supported by a sector over which the country had limited control, adding that favourable gold prices could not be expected to continue indefinitely.
He urged the government to take advantage of the current period of economic stability to strengthen productive sectors and build adequate external reserves to protect the economy against future shocks.
Gold dependence
Prof. Osei said gold exports accounted for a significant share of the trade surplus recorded in 2025, while the recovery in cocoa exports made a relatively small contribution to the improvement.
He noted that manufactured goods accounted for less than six per cent of total exports in 2025, a decline compared with 2024, highlighting the limited role of manufacturing in generating export earnings.
He called for targeted policies to increase the volume and competitiveness of manufactured exports, stressing that processing more of the country’s natural resources locally was essential to diversifying the economy.
He also emphasised the need to strengthen external reserves, warning that the favourable conditions supporting gold revenues were not guaranteed to last.
High borrowing costs remain a concern
Despite improvements in macroeconomic stability, Prof. Osei identified the high cost of borrowing as a major obstacle to private-sector growth and investment.
He said inflation fell from more than 23 per cent in 2024 to 5.4 per cent in 2025, while the cedi recorded significant appreciation during the same period.
Average bank lending rates also declined from more than 30 per cent in 2024 to approximately 20 per cent in 2025, reflecting improved monetary conditions.
However, he said borrowing costs remained too high to adequately support business expansion and competitiveness.
“If credit is a binding constraint for private businesses in Ghana, clearly we cannot be competitive,” he said.
He stressed that the next priority should be to convert monetary stability into accessible financing for productive investments, particularly within the private sector.
Non-performing loans remain a challenge
Prof. Osei also highlighted non-performing loans as a persistent challenge for the banking sector, despite improvements recorded in 2025.
He explained that the risk of borrowers defaulting forced banks to incorporate potential losses into their lending rates, limiting the scope for further reductions in borrowing costs.
Using a hypothetical non-performing loan rate of 20 per cent, he explained that a bank lending GH¢100 could risk losing about GH¢20 if the borrower failed to repay.
He called for sustained efforts to address the underlying causes of loan defaults and strengthen the banking sector’s capacity to finance productive economic activities.
Call for fiscal discipline
On fiscal policy, the ISSER director urged the government to improve domestic revenue mobilisation, maintain fiscal discipline and safeguard public investment.
He called for measures that had contributed to restoring fiscal stability to be institutionalised to ensure that the gains were sustained over time.
Prof. Osei said Ghana needed to preserve its macroeconomic improvements while boosting domestic production, expanding manufactured exports and improving access to credit to make the economic recovery more resilient and inclusive.
Mineral revenues must deliver development
The Head of the Economics Division at ISSER, Prof. Fred Dzanku, said increased mining revenues had not consistently resulted in higher public investment or better social services.
He called for stronger mineral valuation, production monitoring, tax compliance and revenue administration, alongside greater transparency and accountability in the management of mineral revenues.
Prof. Dzanku said Ghana’s economic recovery had continued into 2026, although the benefits remained unevenly distributed.
He noted that economic growth in the first half of the year was reported at approximately 6.1 per cent, but expansion was concentrated in fewer sectors than in the previous year.
He also warned that the trade surplus remained heavily dependent on gold earnings, while performance in other export sectors showed signs of weakening, reinforcing the need for economic diversification.
Focus on jobs and investment
The Deputy Managing Director responsible for Business and Operations at the National Investment Bank (NIB), Belinda Boamah, urged the government to build on its macroeconomic gains and translate them into productive investments, competitive businesses and decent employment opportunities, particularly for young people.
In her closing remarks as chairperson of the event, she said Ghana needed to ensure that its mineral wealth generated lasting development through transparent revenue management, timely transfers to mining communities, savings during periods of strong earnings and decisive action against illegal mining.
She also encouraged financial institutions to convert economic stability into affordable, long-term financing for businesses operating in agriculture, manufacturing and value addition.
Ms Boamah called on policymakers, development partners, the private sector, academia, civil society and the media to use the SGER as an evidence-based resource for decision-making and accountability.
She added that the National Investment Bank would continue to rely on such research to inform its lending decisions.
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