Ghana’s economy grew by 5.3% in the first quarter of 2025, driven by strong performances in agriculture (6.6%) and services (5.9%), according to data from the Ghana Statistical Service (GSS).
However, the government’s fiscal consolidation measures appear to be weighing heavily on several public-sector-dependent industries, raising questions about the sustainability of current economic policies.
While crops, ICT, finance, and transport sectors fueled expansion, four critical subsectors contracted: Public Administration and Defense (-4.2%), Education (-4%), Water and Sanitation (-3.7%), and Forestry (-2.5%). Analysts link these declines to strict expenditure controls aimed at reducing deficits and stabilizing the macroeconomy—a strategy that has helped lower inflation to 18.4% and steady the cedi.
The trade-offs are becoming evident. Reduced funding for water services threatens public health gains, while forestry cuts could undermine climate resilience. Education and public administration shrinkages may also have long-term productivity consequences.
Economists acknowledge the need for fiscal discipline but urge targeted interventions to protect essential services. As Ghana balances austerity with growth, policymakers face mounting pressure to refine strategies that safeguard vulnerable sectors without derailing hard-won macroeconomic stability.
