High inflation, currency weakness, others are big hurdles for growth in Ghana, Nigeria – Deloitte

Professional services firm, Deloitte, is warning governments in Ghana and Nigeria about the threat of high inflation, debt, currency weakness and a restrictive monetary policy environment on their economies in 2025, describing them as big hurdles for growth in 2025.

It therefore wants both nations to focus government efforts toward these issues to realise long term growth.

In its Global Economic Outlook January 2025, Deloitte said the West Africa’s economic output has been limited by the rising cost of goods and services, leading to an increase in interest rates as monetary authorities attempt to rein in inflation.

“Nigeria and Ghana have also been facing currency volatility, which has had a severe impact on their ability to import raw materials and equipment required to boost output. In the first six months of the year [2024], the Nigerian naira has lost over 40% of its value, and the Ghanaian cedi over 20% of its value against the US dollar.^”

Ghana has Strong Growth Prospects

Deloitte however expressed a favourbale outlook for the Ghanaian economy in the short to medium term.”

“Ghana, compared to Nigeria, appears to have stronger growth prospects. Its economy grew by 4.7% year on year in the first quarter of 2024, driven by rapid 6.8% year-on-year growth in the industrial sector”.

The professional services leader added that the Agriculture and Services sectors grew at a slower pace of 4.1% and 3.3% year on year, respectively in 2024.

It mentioned that the country is recovering from a debt-induced crisis, following the government’s ongoing restructuring of its US$30 billion debt.

Similarly, it pointed out that the implementation of monetary policy measures by the Bank of Ghana has also helped reduce inflation.

Ghana secured approval for two tranches of International disbursements so far this year, bringing cumulative disbursements from the IMF to US$1.56 billion since 2023.