Indicators vs Impact: Growth and why it must be felt

Macroeconomic stability is welcome, but for many Ghanaians, it remains a distant, data-driven illusion until it translates into real relief in everyday life.

I have followed Ghana’s economic recovery with keen interest since our near demise in 2021–2022. The journey so far has been a mixture of hope and despair — signs of fiscal stability emerging alongside the stubborn realities faced by businesses and individuals. From the gloom of 2022–2023, we are once again edging towards fiscal stability, driven by a determined pursuit of the IMF programme’s objectives, a fact underscored in the IMF’s fourth review.

The economy, from all angles, looks good so far, yet beneath the glowing stability optics lies a significant disconnect with life at the base, where the vast undocumented workforce struggles. Along the lines of my financial advisory work, I have held various conversations with business leaders, embassy officials, colleagues in the financial services sector, and others in different circles, and this has only reinforced my view.

I was reminded of it one mid-morning on Odanta Street in Asylum Down when I stopped by my Aunt Moda’s little shop to visit. During the hours I was with her, the quietness of business was palpable; the usual hustle of school children and neighbours to and from the shop was almost replaced by murmurs of rising costs and life’s increasing burden.

Moda has heard on the radio that the economy is recovering its way back to fiscal stability, even though items are more expensive, and restocking has become more challenging. At some point during our conversation, she retorted, ‘Go to Makola and see, things are even more expensive’. That her stock liftings are contracting signals to her that we are still in the woods, irrespective of the positive headlines.

Moda’s life and view capture the paradox of our economy. Growth is up at 5.3% as of Q1. As of July 2025, headline inflation has eased to 12.1% and the Monetary Policy Rate has seen a substantial 300bp cut to 25%. Reserves are stronger, standing at approximately $11.1 billion—nearly five months of import cover as of Q2. The cedi has regained circa 40% of its lost value since its trough in Q4 2022. Yet for people like Moda, these stats rarely touch their lives.

Indeed, it is cogent to argue that macroeconomic stability has to be a necessary foundation for proper economic growth. And in fairness, certain stabilisation efforts, such as improved forex liquidity and reduced inflation volatility, have brought relative breathing room for some formal sector workers and import-dependent businesses.

Nevertheless, the story isn’t uniform for all, especially people at the base of our economy, like Moda. For instance, with food inflation set at 15.1% in July, down from 16.3% in June, food prices remain high, and this is because lower inflation only signals slower price increases, not actual declines. The cedi has stabilised, yet a home tailor in my hood at Madjor-Nanakrom still struggles to restock due to sluggish sales and rising costs. And while the minimum wage has increased to GHS 19.97 in March 2025 from GHS 18.51, most informal sector workers earn well below this level, with little protection. Their spending power is susceptible to both global shocks and local inefficiencies.

People in this segment of the economy may not track fiscal or monetary data, but they know that real progress must go beyond headlines and translate into daily realities. As the popular MTN MoMo advert puts it: “Na sika no wo hen?” (“Where is the money?”) — that question becomes their bottom line.

That question lingers in daily life, and it’s here that our economic discourse often loses touch, pivoting heavily on numbers rather than the people behind them.

The gap between national progress and individual hardship is not unique to Ghana. The challenge here is that shocks are more abrupt due to a lack of sufficient buffers. Recovery, on the other hand, is slow and painfully felt by the large swathes of our productive population concentrated in the informal sector, which, though not by deliberate design, remains structurally excluded from experiencing the real gains.

I’ve had conversations with young, enterprising Ghanaians striving to start or grow small businesses, constantly battling high input costs, sluggish demand and thin margins. These individuals are the pulse of the economy, but for some reason, remain accidentally marginalised in economic planning and revenue strategies.

It affirms the belief that we have difficulties in translating macroeconomic stability into real relief, and that, in turn, reveals deeper structural issues, primarily extractive growth and the exclusion of the informal economy. These systemic limitations weaken the impact of recovery where it is most needed.

The disconnect is best understood through a broader lens, which brings me to a brief theoretical turn to set the context for the rest of this discussion.

Years ago, I read Why Nations Fail by Daron Acemoglu and James A. Robinson. A dense but rewarding read, essential for anyone interested in understanding the dynamics behind national prosperity or stagnation. Primarily, the book is about extractive versus inclusive economic systems. They argue that inclusive institutions are the key difference between thriving and failing economies. Their critique of extractive systems resonates deeply with the patterns visible in our country today.

By definition, extractive growth refers to expansion that benefits a narrow elite or sector, while sidelining the broader population, especially informal workers, rural households, and small enterprises. It may boost GDP but fails to broaden prosperity or build resilience. Inclusive growth, by contrast, is broad-based, creates decent jobs and improves living standards for the majority, especially those in the informal economy.

Back to the central focus of this piece with a reflection: Judging from the rhythm of economic growth we have seen in this country in recent years, can we conclude that it is truly inclusive, or simply extractive by another name? I will leave you to judge.

The informal sector comprises approximately 80% of Ghana’s workforce, yet contributes under 30% to GDP, a stark indicator of a persistent productivity gap. This imbalance underscores the need for a deliberate proportionate rebalancing of economic priorities toward a more inclusive equilibrium, favouring labour-intensive sectors that create broader opportunity. Social protection must evolve in tandem with monetary tightening, and public investment in education, healthcare, and private sector support should be regarded as base pillars of economic resilience and a default framework for current and future administrations.

It’s time to support an economic strategy rooted in smart redistribution—targeted investments that make a visible, measurable difference in people’s lives. Growth ought to be felt. Professor Samuel Kobina Annim, the former Government Statistician, reinforced this view when he asserted recently that statistical growth alone is insufficient if it does not distil into social interventions and improved livelihoods. True progress means jobs, affordable goods, and access to decent services. The current gains are a step forward, but Ghanaians want a change they can feel.

After all, Moda doesn’t care about GDP or inflation curves. She cares about her sales, how quickly she can restock, whether her costs are easing, margins improving, and life for her children getting better. To her, performance data mean little if the price of kenkey hasn’t changed or if morning Hausa koko still chips away at her daily earnings. This is the reality for many Ghanaians.

Over to you, our leaders, the youth look up to you.

Fred Eshun Kissi

The writer is a seasoned banking and finance professional with over 15 years of experience in corporate & commercial banking, financial advisory, and commercial strategy across key sectors of Ghana’s economy.

He is the Founder & Managing Partner of Amgol and holds an MBA in Energy (with distinction) from the University of Aberdeen, United Kingdom. He writes regularly on finance, development policy, and economic governance, bringing practical insight to complex macroeconomic issues.