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Ghana overview

GDP: set to remain strong 

We expect the economy to continue benefiting from expansion in oil production and a more favourable credit environment, which should lead it to grow by at least 7.0% y/y in 2018 and 2019. In our view, the Ghanaian economy may be settling into a more sustainable growth path after the boost it received from the oil sector last year. We believe that structural tailwinds should encourage growth, especially given the anticipated improvements in the power sector. Associated gas expected from the Sankofa fields should provide a more lasting solution to power generation, and thus underpin growth in the medium term. 

The BOG has increased the minimum capital requirement of banks from GHS120m to GHS400m, effective Dec 18. The uncertainty around the potential consolidation underway may have negatively impacted on banks’ credit appetite. 

Balance of payments: narrowing C/A deficit 

We expect the C/A deficit to continue narrowing in 2018, supported mainly by flat y/y oil prices. However, a rebound in import demand growth could offset the impact of rising oil prices that might have resulted in a C/A surplus. We forecast the C/A deficit to narrow to USD1.7bn (3.3% of GDP), from USD2.1bn (4.6% of GDP) in 2017. Despite our relatively upbeat view on the external accounts, we highlight that the scheduled shut down of the Jubilee oil field for maintenance purposes poses a moderate downside risk to the trade account. The abolishment of illegal gold mines will continue to bolster official gold mining receipts. 

The anticipated issuance of a USD1.0bn Eurobond later this year will bolster the financial accounts. In addition, given the improved fiscal and macroeconomic position in which Ghana now finds itself, it will probably attract more project-finance type facilities, which would also be positive for the BOP. 

FX outlook: expect some more stability 

A y/y depreciation of around 7% is our expectation for 2018. Despite the expected rebound in import demand, the C/A deficit should narrow further and the country should continue benefiting from reasonably strong financial flows. The general sentiment towards Ghana has turned decidedly positive, and we do not see a lot of domestic-induced risks that may jeopardize this. Second, we believe that the economy is undergoing structural changes, especially in the energy sector, which should improve the competitiveness of the economy. As such, we see USD/GHS at 4.8 by end-2018.  

Monetary policy: likely further rate cuts 

Despite our forecast indicating inflation accelerating over the next few months to 12.5% y/y in February 2018, we believe that the BOG is likely to deliver at least a 200 bps reduction in the policy rate. The reason for such a dovish bias comes from an expectation that the disinflation process is ongoing. However, in our view, inflation is more likely to rise and will probably only start moderating once the authorities implement the 14% reduction in electricity tariffs as planned. The current oil environment also poses upside risks to the inflation trajectory. We believe that the BOG will continue mopping up GHS liquidity at relatively attractive rates, thus placing a lid on excessive market liquidity. The focus of the BOG in 2018 will probably not be on managing monetary levers as such but on ensuring a smooth pre-consolidation process in the banking sector.



29 million

Nominal GDP

USD51 billion

Real GDP growth




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