Ghana’s economic expansion has largely depended on increasing labour and capital, not on new ideas or better ways of doing things. Dr. Maxwell Opoku-Afari, a former First Deputy Governor of the Bank of Ghana, shared this critical assessment. He stated that this approach, known as factor accumulation, includes labour, capital, and extractive industries. It has not focused on efficiency gains or innovation.
This long-term decline in productivity raises serious questions about Ghana’s growth strategy. Dr. Opoku-Afari highlighted concerns about its lasting power, its ability to include everyone, and its strength against economic shocks. He pointed out that between 2013 and 2024, agriculture’s share of the economy remained stable at about one-fifth of Gross Domestic Product (GDP). Industry showed significant ups and downs, mainly due to mining and oil, not manufacturing.
Services consistently dominated the economy during this period. Ghana has not made a clear move towards manufacturing that produces more and sells goods abroad. This shows that economic growth has not come with the necessary changes to broaden the tax base. It has also failed to diversify exports, improve productivity, and strengthen the country’s ability to pay its debts. This gap explains why strong overall growth did not lead to stronger government finances or better external resilience.
Dr. Opoku-Afari, a Non-Resident Fellow of Finance for Development Lab, explained that borrowing was often said to be for infrastructure and key government programmes. However, much of this money was used for everyday government spending. It was also wasted due to cost overruns or did not create much growth. This happened because of problems in how projects were planned, chosen, and carried out. For example, money from oil sales meant for important infrastructure was often used for daily expenses and paying off debt.
As financial pressures grew, more government borrowing increasingly reduced the money available for private businesses. This also hurt investment and the country’s potential for future growth. The effect of government borrowing pushing out private investment became clearer over time. Private sector credit growth slowed down. High interest rates in Ghana made it more expensive for businesses to borrow money. This limited their ability to invest and expand.
This situation is typical of a debt-overhang problem. When the government consistently spends more than it earns and needs more money, it hurts private businesses. This then weakens the country’s chances for medium-term growth. The former Deputy Governor’s insights underscore the urgent need for Ghana to shift its economic focus. The country must move from relying on basic inputs to fostering innovation and structural transformation. This shift is vital for achieving sustainable and inclusive development.
Ghana’s public debt reached GHS 720.8 billion in May 2026, according to related reports. This figure highlights the scale of the fiscal challenges facing the nation. The reliance on factor accumulation without corresponding productivity gains makes managing this debt more difficult. Policymakers must address these fundamental issues to ensure long-term economic stability. Without these changes, Ghana risks continued cycles of high debt and limited fiscal space. The path to true economic resilience requires a strategic pivot towards innovation-driven growth.