Ghana’s Economic Future Brightens with Potential Oil Discoveries – Seth Tekper

Presidential Advisor Seth Terkper has revealed that Ghana’s discovery and development of additional oil fields could catapult the country to upper-middle-income status. Speaking at the Ecobank Economic Forum, Terkper highlighted the potential for significant economic growth through increased GDP per capita.

Economic Implications
Increased GDP per Capita: The discovery of additional oil fields, potentially a fourth, fifth, or sixth field, could drive Ghana’s economic growth by significantly increasing its GDP per capita.
Tax-to-GDP Ratio: To effectively manage the economy and attain upper-middle-income status, Terkper emphasized the need for a tax-to-GDP ratio of approximately 18-20%.

Challenges Ahead

Loss of Concessional Financing: Ghana may lose access to concessional financing opportunities as it transitions to upper-middle-income status.
Increased Reliance on Debt Markets: The country may need to rely more heavily on debt markets, posing risks to economic stability.

Ghana’s Current Economic Landscape

Ghana’s economy has shown resilience, with a GDP growth rate of 5.7% in 2024, driven by the industry sector, particularly mining and construction. However, the country still faces challenges, including high inflation and fiscal pressures. According to the World Bank, Ghana’s economic growth is expected to moderate to 4.3% in 2025 due to fiscal adjustments and reduced momentum in the extractives sector.

Path to Upper-Middle-Income Status
To achieve upper-middle-income status, Ghana will need to implement structural reforms, including:
Strengthening Insolvency Regime: Improving the insolvency regime to promote private sector development.
Access to Finance: Enhancing access to finance for MSMEs and strengthening financial institutions.
Energy Sector Reforms: Implementing reforms in the energy sector to promote stability and efficiency.

By carefully managing the economy and implementing necessary reforms, Ghana can harness the potential of its oil discoveries to drive economic growth and achieve upper-middle-income status.